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Us 51, Washington 21, Romney 21, America 18, Obama 18, Biden 13, Steve 13, Joe Biden 11, U.s. 11, Afghanistan 10, United States 10, Panetta 9, Russia 8, New York 7, Syria 7, Libya 7, Ohio 6, Obama Administration 6, Cyberspace 6, Wisconsin 6,
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  CSPAN    U.S. House of Representatives    News  News/Business. Live  
   coverage of House proceedings.  

    October 12, 2012
    9:00 - 2:00pm EDT  

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host: what do you do and where are you studying? to be an'm studying engineer. host: that is parker. just turned 18. a first-time voter. next, pam nebraska. tell us your story. caller: i just retired last year. i have never voted. i do not think about it. i am too busy working. i have been listening to the news, every channel i can get through, and i had decided before the debate, and i am going to vote for obama. i was looking at both sides before. i thought what is going on, who is seen what?
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to me, mitt romney is not honest with people. he flip flops so much, he says so many things, one day this, one day that. he changes so much. you cannot trust a person like that to run for president. another thing is people blame the president because they cannot find a job. i am sorry. when you need the money, you do anything. i washed dishes. we do whatever to get by. i have found other jobs so i can live a stable life. you cannot blame it on a president like that.
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host: did you just recently registered to vote? caller: yes. host: what was the process like in nebraska? caller: i do not know. it is ok. caller: i don't know. it was ok. host: where are you from? caller: i'm from thailand. host: thank you for calling. vance, tell us why you are a first-time voter. caller: just for the most part, and overthrow -- and on the road toward garver having difficulty making it to the polls. host: why is this election the when you are going to vote in?
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host: -- caller: i am working locally this time, so i can actually get to the polls. i have seen some things that really disturbs me. obama has kept no promises. when obama first got into office democrats have control. romney in his state sure that he could work with the democrats bipartisan. i'm hoping that is the case.
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the hearings about what happened here just a couple of weeks ago with our people overseas getting killed, they had asked for several times, for reinforcements and for protection. if they're intelligent people in the administration cannot get the information that people overseas need help, then the same intelligence people can't tell them there is a bomb being made overseas. the vice president said that they did not know they needed
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any help. colonel plaze said they had asked for it several times. host: c-span coverage that hearing yesterday and you can watch that online at c-span.org. the state of washington, has it got -- gone to all male -- in -- all mail-in voting? partially go to that? caller: yes, the ballots will be mailed to us and we can you drop them off at boxes or mail them in. host: and how will you do it? caller: i'm going to drop mind off in a box. host: that is vance in washington. in theglie's of this
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"washington post" last night of these two talking. mom and joe biden greeting each other. and here is paul reihan's wife meeting joe biden's son. jonathon in charlotte, n.c., why are you a first-time voter? caller: i just started voting because what i registered to vote last time in 2008 i was not old enough of the time to vote. an hour i am old enough. i'm kind -- and now i am old enough. i'm kind of like i have a say so as far as what is going on in my generation. host: who are you voting for? caller: i am voting for obama.
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host: i am not encoding simply because i'm black or because he is black or because of any of those things. i am voting because of the fact that obama is thinking about the middle costs -- middle class. we have completely thrown our country and down the drain by saying that we will tax people who are trying to get somewhere instead of taxing people who are already somewhere. these people who are making billions of dollars have enough money to help others in need. they have enough money to give to the ones in need. instead of uniting the country and doing bad, we decide that we want to say, listen, we are going to pay these guys more than we will pay these guys. you have people on welfare that
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are barely making it. and obama is giving them a fighting chance. we have to give -- let me just say this one thing. and we ought to give the community a fighting chance. everybody has to have a fighting chance, as joe biden was saying last night. that is what they are thinking. host: did you participate in the democratic national convention in charlotte, when it was down there? caller: yes, sir. i was working down there. it was a mandatory work. host: what kind of work were you doing down there? caller: i was doing the about term attendant jobs at the airport. but i have just got laid off. and i'm going to re hard time. tuesday that 47% of the country does not want to work, that is completely inaccurate for mitt romney and ryan to say. host: were you hired because of
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the convention and then laid off after word? caller: i was hired away before the convention. but the thing was that i got fired for unnecessary reasons. they were just during layoffs and layoffs at and things. i think obama said it best when he ran in 2008. we're going to go through bad times. you have to go out before you can get good. -- go bad before you can get good. he said this was going to take us some time, but we are going to get through it. it is going to get hard before it gets good. if we unite together and work together as a country. host: we will leave it there.
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but go to john in long beach. tell us your story appeared caller: i've never voted, but i have -- tell us your story. caller: i have never voted, but i have followed the politics. i grew up in south beach and in alaska. i always wondered why the politicians never talked about the old issues, the war on drugs that kind of thing. i just don't know where we are coming from these days. host: what is a real issue to you? the war on drugs is a real issue? caller: i just don't understand it, you know. every state should decide their own opinion on how they fight that battle themselves. host: victor in capitol heights
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maryland to a dot here in the washington area. victor, why are you a first-time voter? are you with us? last chance for victory. we're going to move on to sarah in redmond, ore.. why are you a first-time voter? caller: i was just shy of 18 in the 2008 election. host: are you looking forward to it? caller: i am. and i've always been interested in what it's going on in politics. i was not able to vote. i would not have voted for obama ketsana -- for obama, and i definitely still will not. the reason for that is a i watched my parents -- you know, when they were young, there
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were not smart with credit card. izod a bankruptcy that they went through when i was in high school. -- i saw the bankruptcy that they went through when i was in high school. we went through this as a country. they did not seen the obama administration does not really care about the deficit and how high it is getting. why would you raise the deficit when you owe so much money? it will bankrupt our country. host: what do you do a in redmond, ore.? caller: i am a full-time student at a community college and i also work at a fast-food restaurant to pay bills. host: where are you studying? caller: criminal-justice. host: where are you watching c- span at 6:00 a.m. in the morning in oregon? caller: i get up early allot. earlier, i was watching a different program, in b.c. i think, and i think there were a lot of very baidoa -- nbc, i
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think, and i think there were a lot of very biased reporters. i switched channels. host: is this your first time watching c-span? caller: no, it is now. i actually watched it a lot. host: that is there a studying criminal justice in redmond, ore.. next up is michael in springdale, another first-time voter. caller: i was flipping through the channels here and listening to a lot of individuals call in and one of the topics that came up is the military. and being a first-time voter, i want to say that as a veteran who has served and according to the debate last night and during what joe biden and paul ryan had to say on those issues, i would have to completely side with the nine biden -- homicide with biden as far as -- i would have
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to side with biden as far as a and bring the troops home from overseas and making sure that -- obverses ryan focusing on other countries being protected instead of a homeland security. i am voting for obama. him isson i'm voting for because in the last four years we have not gotten out of a hole we are in, but we are making progress. when you take the amount of debt and the troubles we are in, we cannot just change that overnight. i think people want something immediately, but a matter of the situation that is not going to happen. i think he has been working hard and has been honest in saying that he is trying as best and working to try to make things better for things like obamacare and things like that.
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but he has come out and said, you know, i have not to fill their thing i have promised, but i'm on track. i can go to a restaurant -- as far as the paul ryan plan, i can go to a restaurant and tell them what i want, but i don't know what i'm getting. host: if you want to participate in the conversation, you can also do it on facebook. here is our page. the next batter -- the correne banner is the next debate coming up. the one on october 3 already happened, of course. the one on october 16 at hofstra university and in the final one on october 22, lynn university in boca raton. you can go down the page and see what the high and low points were from last night's vice presidential debates. and you can continue to follow.
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of 381 comments have been made so far. it will -- it will be posted on all day long. sheila in ohio, why are you a first-time voter? caller: because for the first time in my life -- by the way, my husband is a first-time voter,, too. we are worried about the future. we have grandchildren. we think someone needs to step up for them and we need a change. host: by change, do you mean mitt romney? caller: i am definitely voting for mitt romney. there are several of us that are going to get on the bus and go down together to vote for mitt romney. i'm in the medical field and if obamacare passes, we will all be in trouble. it has got to change. i do not feel i put my
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grandson's future into the hands of somebody who has not gotten it right the first time around. how can we trust him with a second term? host: when you say you are going to get on a bus, have you registered to vote? what is the process like in ohio? caller: yes, we have all registered to vote. there are 20 of us. i have a friend who has a bus and we all want to go together. we will all have an romney t- shirts and we are all going to go down and vote. the process is simple. we went down and signed up and registered. we got our cards in the mail. host: where are you? caller: we are not far from mansfield. we lost a big plant in ontario, ohio. host: i remember reading a -- an
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article in awhile back that mansfield, ohio is ground zero when it comes to presidential had. you are getting all of the presidential and constantly. caller: yes, we are. host: and that is sheila in shelby, ohio, and of a first- time voter. here is a review of last night's debate in the "washington post." here is the headline. florence in new jersey, where you a first-time voter? caller: i usually try -- to drive a truck. i did register one time. i was always at a truck stops. by sater brown and i hear people talk and for some reason, everybody just lies.
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they make up stories. and i remember a time when i came through a spot and the guy said it was snowing. i was struck by last night's debate. you could tell paul bryant was lying. i will tell you why. if you look pacquiao, the debate, every time he would say something -- if you look back at the debate, every time you would say something, he had to take a lot of water. one thing i know, when you like, your mouth gets dry. -- when you lie, your mouth gets dry. i know this for a fact. i remember one time i lied, because it was just natural. i did not want to take the blame. but my mouth felt like it had
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stand in it. when people are lying, you can tell. they always have to drink a lot of water. that was a sure sign he was lying. i'm not -- i'm going to vote for obama. the reason -- i'm not happy with all he has done. we picked up more liberals now than four years ago. things are picking up. gas is going through roof. is that all obamas fault? the man last night, he was lying.
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host: forest, did you ever tell the truth about your truck accident? forest? caller: yes? host: did you ever tell the truth about your truck accident? caller: did i tell the truth? i lost the case. host: thank you for your time this morning, i appreciated. -- appreciate it. we are going to do a segment coming up called america by the numbers. we will be looking at the job segment. we have talked about the unemployment rate, where growth is going, etc. that is what we will be talking about today on america by the numbers. it will be right back after the break.
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>> c-span brings a special perspective into what is happening in washington, particularly your coverage of the house and senate. if something is going on in the house and senate, and something will go on in the next five years -- maybe not this year -- c-span coverage this authoritatively, very well, and it is one of the major news happenings in washington. we are all struggling with what
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is going to happen with health care. c-span was the authoritative voice covering what is going to happen to health care. we are worried about the financial system. c-span again, is the authoritative voice of what the congress will do or will not do in terms of the financial system puritan >> c-span, created by america's cable companies in 1979, brought to you as a public service by your cable provider. -- your television provider. >> the thing about eisenhower, he would never say when he was going to use nuclear weapons. why is this important? in the 1950's when there were relatively new and we threaten to use them in various stages, ike did, but nobody ever knew whether he meant it to. to be credible as a deterrent, you how to -- you how to be
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credible. but he never told anybody. talking about loneliness of command, the use of nuclear weapons, what could be a greater command decision and out? he had accomplished many things, but now he is president and he has an equal or greater responsibility at a time when nuclear weapons are new. we have not just one or two, but we are building an arsenal. are we going to use these things or not? i can use them as a tool. he embraced -- he used them as a tool. he embraced them as a tool to avoid any war. >> sunday on q&a at 8:00 p.m. on c-span. this month as the presidential candidates meet today, we are asking middle and high school students to send a message to the president as part of this
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year's c-span studentcam video documentary competition they will be answering a question of what the most important issue the president should consider in 2013. it is open to students grades 6- 12. for complete details and rules, go online to studentcam.org. >> "washington journal" continued. host: we are back live on quality control and on your screen now is thomas nardone with the bureau of labor statistics. he is the associate, commissioner of unemployment and employment statistics. withinardo, let's start the unemployment rate, 7.8% currently, correct? guest: that is correct. host: how does bls labor statistics get to the number, briefly guest: there is a step
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-- a survey done every month that its content -- conducted by the census bureau. 60,000 households are interviewed every month for people in the household over the age of 15 and we ask a series of questions to determine if they are one of three categories. are they working, which would make them employed? have been actively seeking work in the prior four weeks, which would make them unemployed. and if they are not in those two words, they are not in the labour force. it is a sample survey, like a poll. host: is it random? guest: essentially, yes. it is more complicated than that, the statisticians would say, but yes, it is random peridot host: is it the same 60,000 every month? or a different 60,000 exxon --
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different 60,000? guest: if they agree to the survey, there will be in it for four months, out of it for eight, and then at come back into it for another four. host: how closely do you find when you review what you have done cannot because there always seems to be an adjustment a month or two down the road, correct? you come back and say, well, this is what we found. how close is bls to the actual results? guest: the data from the household survey is not revised every month. there is another survey that is done every month, which is a survey of business establishments. there are about 486,000 business establishments survey every month. because of the large size of that sample, we first received the data, we do not have the reports in for all of these establishments. when we get more reports in
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subsequently, that is why there is a revision to what is commonly referred to as the jobs. that is where we have that provision. host: the numbers are on the screen. if you like to dial in, please do. christopher rugaber with the associated press is an economics reviewer. i wanted to ask you about what jack welch, the former chair of ge, wrote in "the wall street journal" this week. he wrote three statistics. were you as an economics reporter, someone who covers
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this issue, were you surprised at the drop in unemployment? guest: yes, i was, but frequently, we are surprised by the jobs report. i joke with my editor and so forth about preparing for different outcomes. usually, it comes out and it will we did not prepare for. it is not unusual for it to be surprising, in a funny way. the household survey that tom was talking about that gives us the unemployment rate is a volatile survey and at times. you have sudden moves. the unemployment rate cabin -- had been relatively flat for almost eight months and then there was this drop. it is not that unusual, either. tom initially change his tune. there was a comment that suggested manipulation by the obamas administration. i do not know if you suggest it, but you said straight out that
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the obama administration had manipulated it. then you change your tune a little bit. what usually happens over time is that some of these things even out. we are unlikely to see another sharp drop-off in the unemployment rate. another issue that appears to be true is that we are near a low level of people in terms of those participating in the work force. and it went up last month, but it is near a 30-year low. there are still aspects of the job market that are still weak. the unemployment rate is still obviously very high. he had a lot of interesting things to say, but the "wall street journal", it was a bit different from the tweet he put out. host: mr. nardone, what is the bls response to what jack welch wrote? guest: the response to the idea
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that somebody in the white house called us up and told us that the unemployment rate needed to be 7.8%, that is simply not true. it did not happened. if it did happen, the folks that work on these numbers, they would be the ones the sending out a tweet. putting that aside and talking about issues that were raised, should you focus exclusively on one month's number? we would absolutely agree, no, there are lots of numbers in the press release. we put out lots of data. it is important and we knowledge of up-front that the knowledge -- that the data are subject to a sampling error of. they are estimates. we try to make them as good as we can, but they are only estimates of what is going on in the job market. host: total non-farm trollops
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january 2003 as a timber 2012, this is a chart here. it is currently on the upswing. can you tell us where we stand right now? what does this september, 2012 figure mean and what is it? guest: what this chart shows is that as we all know, there was a huge loss of jobs. that is the shaded part of the jobs. we lost about 8.8 million jobs during the recession. the job loss continued beyond what was considered the official end of the recession. the national bureau of economic research said it ended in june, 2009. payroll employment kept dropping until february, 2010. since are very, 2010, we have added 4.3 million jobs. but that still means we are 4.5 million below where we were at
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the restored -- at the start of the recession. host: how is it that the unemployment rate is going down? our people dropping out of the job search? guest: that essentially happening some. zogby but it discouraged. others returned to school either because they are frustrated or because they want to get more training or education. some people are finding jobs. economists have looked at different calculations of which is the better factor -- the bigger factor, or people dropping out or getting more education and training and my understanding is that there are equal roles being played by each for spirit -- each force. but there are definitely some dropping out. some of that is the baby boom generation starting to retire. it may not be a "dropping out,"
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but people choosing to retire and leave their jobs. some older people may have lost their jobs and cannot find new ones and are taking early social security benefits. there is some of that. host: mr. r doane, the labor force participation -- mr. nardone, a labor force position rick, please explain this. guest: the take the people who are employed in those who are unemployed and combine them and you get what is called the labour force. divide that by the population in at 16 and over and you're of the force participation rate. is the proportion of the population that is either employed or actively looking for work. and this chart shows the trend rate over a long time for empirical -- timeframe. you are looking at several things, sort of long-term secular trends that go on, but also the impact of the
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recession. you can see the rate dropped quite a bit during that shaded timeframe, but lost one, that represents the recession. it is also interesting to note that the rate never really got back up to where it was between those two shaded areas. the one in the middle representing the recession in early 2001. at the rate never really recovered from where it was. that was sort of a combination of a cyclical and secular factors. for many decades, the labor force participation rate was trending up because of more women entering the labour force, and also because of more young people, people born during the baby boom era. in the late 1990's, a long word abroad -- long-term upward trend, per dissipation of women
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find out. what we saw in the last decade we saw what was going on in the business cycle. rates were affected by that. what we are seeing now is a combination of that and probably also the baby boomers are retiring and moving out of the labour force. host: chris berber berber -- christopher rugaber, how would you describe the jobs economy and right now? guest: this is the weakest recovery we have had since world war ii. the jobs numbers each month, we have averaged around 145,000 jobs created per month this year. that is barely enough to keep up with the growth of the working age population. and it has been a somewhat brazilian recovery in that there have been a lot of fears that we would go back into recession at various times and that has not happened.
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the overall economy has grown roughly 2% since the recession ended in june, 2009. that is a fairly weak growth rate, particularly after the death of the recession. by many measures, this is easily the worst since the great depression corporate -- the great depression. the modest and sometimes weak growth we have had has made it very difficult for the unemployed. we have long-term unemployed, those are of work for six months or even a year, that has been a record -- at record levels. ben bernanke has long term crashes -- the prices of long- term unemployment. -- the crisis of long-term unemployment. host: let's begin with a call from orlando, florida.
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please tell us your situation. caller: my situation is to tell mr. obama to doing a good job of .he past four years preparin [indiscernible] to go to the hospital, to go to the clinics. my family can go to the clinic. obama is doing a good job. but for years is not enough -- four years is not enough to do what obama is supposed to do.
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host: we will leave it there. thomas nardone, when talk about 7.8% of the work force unemployed, how many are we talking about? guest: about 12 million now. host: and do you have an estimate on how many had dropped out of the search? guest: we do have an estimate. refer to these people as marginally attached to the labour force. there are about 2.2 million that all into that category right now. these are people that have not worked in the last four weeks, but sometime in the last 12 months or since they have lost a job. and they are not currently looking. a subset of the group are people referred to as discouraged workers. these are the folks who said, the reason i'm not currently working -- looking is because i don't think there are any jobs available, or do not think there are no jobs available for which i would qualify.
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there are about 800,000 of those folks. host: how many are there in the work force? guest: about 150 million people host: how many people have been on unemployment for an extended time frame? you have a chart here from bls, percent unemployed 27 weeks or more. many: i don't know how people have been on unemployment insurance. that is one of the main misconceptions. the data on the unemployment rate do not come from the data we get from the unemployment insurance system. we do have an estimate on how long people have been unemployed. the chart shows the percentage of the unemployed that have been unemployed for 27 weeks or more. that is about 40% right now. it was worth at about 45%. but that is a pretty historical level, even at the 40%. host: and you can see the recession here in the dark blue,
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and a sharp upward to take remaining right here, right now. anything you want to add? guest: the number of people on unemployment benefits has come down. 26 weeks is the standard program. there are various and extended program ago as long as 79 weeks. that adds up to about 5 million people. at has come down a lot since the high point in 2010, when it was briefly as many as 11 million people getting unemployment benefits. at that time, but of its extended to 99 weeks and it was covering a pretty large portion of the unemployed. right now, about 5 million are getting unemployment, and 12 million are considered unemployed by the labor department. a lot of people do not qualify. you ought to be laid off to qualify. some people have eustis -- have
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used up their benefits, even the 99 weeks and at the end of this year, some of the extended benefits may expire and they will lose even more extra benefits they are getting. host: we have been talking to christopher rugaber and thomas nardone. julia in kingston, new york, hello. caller: host: hi, how are you good. please go ahead -- caller: hi, how're you,? host: good, please go ahead. caller: i wanted to call and talk with you guys a little bit. i'm undecided. i am also one employe. -- unemployed. host: why are you unemployed and how long?
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caller: i have been unemployed for a good amount of time. for about six months now i have been unemployed. host: do you receive unemployment compensation? caller: no, i do not. you know, i -- a cross my mind. i wondered if i should do that and everything, you know. it is so hard when people think, let me go on unemployment and this and that's -- are you hearing me ok? host: please, go ahead. we are all listening. caller: i am sorry. i'm thinking about many things. how about you ask me something host: i think we've got enough of your story there. mr. rugaber, anything you want
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to -- anything that stuck out to you about what julia had to say? guest: there has been a lot of long-term unemployment for people. i talked with a lot of people who have lost jobs. one thing they face is the longer people are unemployed, the concern is that it will be harder for them to find work. either their skills erode, and there aren't concerns that employers will start to worry when they see someone out of work for an extended time frame. they wonder about hiring the person. there has been talk about whether that should be banned or regulated in some way. it is definitely a big problem that could purses even as the economy grows. -- could persist even as the economy grows. even as the economy improves, there will be some people who have trouble finding work.
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host: mr. nardone, when you hear julia's story, the chief into the statistics you would see? -- does she fit into the statistics you would see? guest: she would. and if she had been looking for work in the last four weeks, she would be counted as unemployed. if she had not an looking for the past four weeks, she might fall into that category of marginally attached. that is about 2.5 million people in that category, not 2.2 million people. i needed to correct myself. the important thing to keep in mind is that i mentioned earlier that these are just estimates. the surveys are really telling the story of people like julia. and those of us to work, we all know that creates problems.
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these statistics are not just numbers, but reflections of what is happening to real people. host: steve in madison, wisconsin, hello. steve? and we are going to move on from steve to thomas in plainfield, indiana. thomas, you are on the "washington journal." what is your job situation? caller: good morning. i'm doing great. my job situation is wonderful. i'm very close to retirement. my wife and i only have so many months of retirement. i have been working just about all my life. i am a baby boomer. i have seen the ups and downs. host: what kind of work do you do? caller: i work for a shipping company. i work for one of the world's largest shipping companies.
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i work for flying tigers in chicago. it was headquartered in los angeles. we merged with this other large carriers, which you all know, a merger back in 1989. it brought me from chicago to minneapolis, which is a strong republican state. -- indianapolis, which is a strong republican states. i am a strong obama person. i worked the polls in my district. i am a democratic judge. but the state of indiana, as i say again, it went blue in 2008. but right now, i do not see that happening again. it was almost a miracle. but one thing about the rodney/trying to get to -- the mitt romney and paul reiser and ticket, they are standing behind the right to work. and those jobs are lower paying
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jobs. they may bring more jobs to this day, but they will not bring higher-paying jobs. i stand behind obama/biden ticket. they have set a lot about jobs, not the right to work jobs provided he brought of the automobile -- not a right to work js. he brought up the automobile industry, which are strong paying jobs. host: we are going to leave it there. mr. darden, you have been doing this for a long time at bls. have you ever been contacted by an administration? house separate are the politics? guest: we have never been contacted in a way of them
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saying, what the unemployment rate to be experts -- to be a particular number. i have had frequent calls with the council of economic advisers, with people in congress asking for explanations. but i think the policy people respect the fark that the statistical agencies -- the fact that these this is a go agencies feed into the decision making by policymakers encourage private individuals and businesses, and they need to not interfere with that. because it does not benefit anyone if the information we are providing is suspect. host: christopher rugaber, i do not know if the word dependent is the right word, but how much you use and trust the bls figures that come out nearly
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every week on these matters? guest: we trust did pretty much. it is important to talk to economists and other folks to see what they think. but we trust in many ways because is a number that has been coming out for so long. i have heard economists say that perhaps in their gambert days they were suspicious or water tower was all done. -- in their younger days, there were suspicious or wondered however was all done. and we are pretty dependent in terms of this snapshot it provides. the monthly jobs report is a high-profile, obviously, with a presidential campaign. and the unemployment rate is probably the most well understood -- the thing people most understand when they think about the economy and the health of the economy. host: thomas nardone, when we look at employment in toure
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private, is this the jobs report on a monthly basis -- in total private, is is the jobs report on a monthly basis of how many jobs were added to the economy? guest: that is right, that is the other headline number from our report other than the unemployment rate. this is looking at the private sector. we see there was a time when we were losing a massive number of jobs. we have been gaining some now. in 2012, job growth has averaged about 145,000. host: and this is done on a monthly basis? guest: yes. host: 104,000 in july, 2012. are all of these charts available to anyone who goes to the bls website? guest: all of the data is about
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-- is available. people can get the press release, access the time syria -- the time series data that we have. we have a lot of information on the methodology on the website. there's a lot of information in -- on the methodology in the press release. host: christopher rugaber of, is the fiscal cliff -- is there a real chance this could happen? guest: i think so. people have differing opinions on that, but the spending cuts and tax increases that are scheduled to go into effect at the end of the year, there's a lot of worrying among economists, but also business people off, that it could slow the economy in many areas. you have a lot of defense contractors worrying about what will happen at the turn of the new year. it is really anybody's guess.
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in terms of congress and whether they can come together after the election, but before every new person takes office, there is hope that congress and the white house can come to an agreement anteater postponed those spending cuts and tax increases, or come to -- and either postpone those spending cuts and tax increases, or come to some agreement. i think everyone thinks they may wait -- they may postpone and wait until the new session comes in and let them figure it out. but the so-called lame-duck session might see reasons to make a deal before the new people coming in. we will see. host: the next call comes from adam in phoenix, arizona. you say you are a student. what are you studying?
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caller: and studying economics. host: you have heard our conversation this morning. and what do you think? caller: i have. mr. rugaber said he was surprised with the unemployment dropping, but i was just reading about a month ago and q e. three launched. i was wondering how the printing of the new money affected that. guest: it was probably a little early for qe3, which was launched into a camper. in this report -- this report came out last week force of gambert. it is probably a little early to attribute the -- the last week of september. it is probably a little early to attribute to the drop in unemployment to that.
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the goal of that will be to continue to lower mortgage rates, which are already at record lows, but as they go lower, more people may refinance their mortgages, and hopefully more people will buy homes. for those who refinance, ideally, it would free up more money for them to spend. and businesses might be able to take advantage of low interest rates. there's also more hope that people will buy stocks and other higher risk investments and moved out of bonds. that would create a feeling of wealth. if they feel wealthier, they will spend more. by september, it is probably a little early to retrieve that to qe3. host: mr. nardone, a view at the bureau of labor statistics measures such an effect of such a policy? guest: actually, we avoid getting into and a valuation of
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policy. our focus is putting out the numbers. we do not want to create a situation where people, by doing policy analysis, people think we are taking sides. we let others do that. host: jeanna in illinois. what is your question or comment? caller: i am unemployed at this point. i was working for a company. i do not know if i'm allowed to mention it. host: sure. caller: bob r.t.a.. and we shut down every summer for a couple of months -- bombardier. we shut down every summer for a couple of months. we were supposed to come back to work in september 24. they called us september 15 to a meeting and they shut the plant down. host: are they transferring it out of country or to another plant?
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caller: they are saying they no longer want to be in the sport coat world. -- support boat world. host: is that a canadian company? caller: yes. host: are you collecting unemployment? caller: beginning win? -- yes. host: when? caller: i was already on unemployment. but we were not looking for work because we were to return to work on the kemba 24th. -- september 24. everybody was preparing for it. they're working up to the data they called this meeting and told us they were closing the plant. host: how many people got laid off? caller: 350.
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host: thank you very much. mr. r doane, is geography in the unemployment or employment figures? guest: would have already been in the unemployment figures. as i mentioned earlier, those actively seeking work, there is a little bit of an addendum to that. people who have been given a temporary layoff and given a date to callback -- come back to work, she would have been counted as active unemployed. even if she was not looking for work. now they are not calling her back to work and jeanna is collecting unemployment insurance. generally, there is a work requirement for that. host: had you heard about
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bombardier? guest: i had not heard about that in particular, but if you local as recently as the very early 1980's to my very tough recession and kamal lot of those who lost their jobs or were laid off, it was deborah. the idea was that when -- it was temporary. the idea was when the economy bounced back they would be called back. the most recent ones, the proportion of people who lost jobs, the jobs are not going to come back. people who may be spent years at a certain job with certain skills now have to go out and find something new. it is harder to do than just get through a temporary layoff. host: another bls statistics and charts, it says manufacturing and growth. there is the no. 480 next to it.
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what does this mean? guest: this is looking at the number of jobs added or lost since february, 2010. february, 2010 is when payroll employment started to go back up. host: 480,000 jobs have been added? guest: 480,000 jobs added in manufacturing since 2010 when overall unemployment started to go up again. our information services and the government. gentlemen, we are out of time. we appreciate your time on the "washington journal." house of representatives is coming into session. a pro forma session. there will be no real business done today. thank you for being with us. enjoy your weekend. book tv begins on c-span 2 at 8:00 a.m.
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the chair lays before the house a communication from the speaker. the clerk: the speaker's rooms, washington, d.c. october 12, 2012. i hereby appoint the honorable scott desjarlais to act as speaker pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. sage: the prayer will be offered by the guest chap lip, dr. david r-l r. roberry institute of the religion of the church of jesus christ of latter-day saints, washington, d.c. the chaplain: let us pray. dear father in heaven, humbly we bow before thee, recognizing our dependence upon thee and seeking thy guidance in the proceedings of this, the people's house. father, we express profound gratitude that thou has established our constitution by the hands of wise men who now
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raise up for this very purpose. may the members of this house, their staff, we as citizens remember and follow the constitution's principles carefully and faithfully. prayfully we ask that members and their staffs be strengthened with righteous resolve, following thy ways in action and intent that they may be worthy of thy divine guidance in this critical time. father, may the house members' families who sacrifice so much that the work of this house may be accomplished, be strengthened, and blessed, and appreciated. indeed, we pray for strength and blessing for all families in our great land. there is a great diversity, father, in the manner in which thy children pray to thee and call on thee and so with great respect i now invite each in
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his or her own way to close this, our prayer, as i do in mine in the name of jesus christ. amen. sage: pursuant to section 3-a of house resolution 788, the journal of the last day's proceedings is approved. the pledge of allegiance will be led by the gentleman from massachusetts, mr. mcgovern. mr. mcgovern: i ask everyone to join with me. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. sage: pursuant to section 3-b of house resolution 788, the house stands adjourned until 2:00 p.m. on tuesday, october 16, 2012.
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>> the house of representatives gambling in and out of this pro forma session. there will be in a pro forma this tuesday at 2:00 p.m. lawmakers are back in their home districts campaigning before the elections. the house returns november 13. here on c-span today coming up at noon, we will take you live to the cato institute in washington. there posting a hearing on defense spending cuts. that is coming up live at 2:00 p.m. -- at noon eastern here on c-span. also, live coverage on c-span 3 today on the new america foundation. their hosting a discussion looking at the arab spring, the transitions in libya. but on c-span 3. and white house coverage to tell you about as ridiculous. the candidates' schedules.
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the pro -- vice president and his wife calling up last night's debate at the university of wisconsin and a lacrosse, wisconsin. live coverage at 2:45 eastern. president obama in the nation of's capital. no public events scheduled. mitt romney has a campaign event in richmond before traveling to ohio. you will be teaming up with paul ryan for a rally in lancaster. you can watch coverage of that starting at 5:40 eastern. >> as the vice-presidential candidates returned to the campaign trail, we want to give you another opportunity to watch last night's debate hosted by a college in kentucky. and in about 90 minutes, we will open our phone lines and get your comments, your reaction to their performances.
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>> good evening and welcome to the first and only vice- presidential debate of 2012. i am martha raddatz. i am honored to moderate this debate between the two men who have dedicated much of their lives to public service. it is divided between domestic and foreign policy issues. i will move back and forth between foreign and domestic. we will have nine different segments. at the beginning of each segment, i will ask both candidates a question and they will each have two minutes to answer. i will encourage discussion between the candidate with follow-up question. it has been determined that the vice president biden will be first to answer the opening question. we have a wonderful audience here at centre college.
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right now, we welcome vice president joe biden and congressman paul ryan. [applause] >> good evening, gentlemen. it is an honor to be here with both of you. i would like to begin with libya. on a rather somber note, one month ago tonight on the anniversary of 9/11, ambassador stevens and three other brave americans were killed in a terrorist attack in benghazi. the state department has made
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clear there were no protesters there. it was a preplanned assault by heavily armed men. wasn't this a massive intelligence failure? >> chris stevens was one of our best. we will find and bring to justice the men who did this. we will get to the bottom of it and wherever the facts lead us, we will make clear, whatever mistakes were made will not be made again. you should take a look at his most important responsibility. that is caring for the national security of the country. take a look at how he has handled the issues of the day. on iraq, the president has said he would end the war. governor romney said that was a tragic mistake.
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we should have left 30,000 troops there. with regard to afghanistan, he said he will end the war in 2014. governor romney said we should not set a date. when it came to osama bin laden, the president, the first day in office, i was sitting with him in the oval office and he called in the cia, my highest priority is to get bin laden. prior to the election, governor romney was asked the question about how we would proceed. he did not understand it was more about restoring america's heart. if you do harm to america, we will track you to the gates of hell. the president of the united states has led with a steady hand and a clear vision. governor romney, the opposite.
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the last thing we need now is another war. >> we mourn the loss of these four americans who were murdered. you take a look at what has happened in the last few weeks. they sent the u.n. ambassador out to say that this was because of a protest and a youtube video. it took the president two weeks to acknowledge that this was a terrorist attack. he went to the u.n. and he said six times the youtube video. if we are hit by terrorists, we are going to call it. our ambassador in paris has a marine detachment guarding him. should we have the marine detachment guarding our ambassador in benghazi? we knew there was an al qaeda cell. this is becoming more troubling by the day. they first blamed the youtube video. now they are blaming the romney-
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ryan ticket. we had the same position before the withdrawal. let's make sure we secure our gains. the vice-president was put in charge of those negotiations by president obama. he failed to get the agreement. that is what we were talking about. when it comes to our veterans, we owe them a great debt of gratitude. including your son. we also want to make sure that we do not lose the things we fought so hard to get. with respect to afghanistan, we agree with a 2014 transition. we want to make sure we are not projecting weakness abroad. this benghazi issue, it is indicative of a broader problem. tvt we're watching on our screens is the unraveling of the obama foreign policy.
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it is making the world more chaotic. >> i want to talk about, in the middle of the crisis, governor romney talked about apologies from the obama administration. was that appropriate in the middle of the crisis? >> on that same day, the obama administration was in that same position. they disavowed their own statement they put up earlier in the day in cairo. it is never too early to speak out for our values. we should have spoken out right away. we should always stand up for peace, democracy, individual rights. we should not be imposing these devastating defense cuts.
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when we equivocate on our values, it make us look weak. when we look weak, our adversaries are much more willing to test us. >> that is a bunch of malarkey. this lecture on embassy security. the congressman cut embassy security in his budget by $300 million below what we asked for. so much for the embassy security. governor romney, before he knew the facts, before he knew that the ambassador was killed, he was out making political statements. he was panned by the media around the world. this talk about this weakness, i do not understand what my friend is talking about.
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this is a president who has done everything he has said he is going to do. he has repaired our alliances. this is a guy who brought the entire world to bring about the most -- the most devastating efforts on iran to make sure they stop. these guys bet against america all the time. >> let me go back to libya. what were you first told about the attack? why were people talking about protests? when people in the consulate first saw armed men attacking with guns, there were no protesters. >> we were told by the intelligence community -- as they learned more facts about what happened, they changed their assessment. that is why there is also an investigation as to whether or not there were any lapses.
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>> they wanted more security there. >> we did not know they wanted more security. by the way, at the time, we were told exactly what the intelligence community told us they knew. that was the assessment. they changed their view and made it clear they changed their view. we will get to the bottom of this. usually in a crisis, we pull together as a nation. even before we knew what happened to the ambassador, the governor was holding a press conference. that is not presidential leadership. >> i want to ask you about -- the romney campaign talks a lot about no apologies. should the u.s. have apologized for americans burning korans in afghanistan? should the u.s. apologize for americans urinating on taliban
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corpses? >> what we should not be apologizing for are standing up for our values. what we should not be doing is saying to the egyptian people, mubarak is cracking down on them, that he is a good guy. and the next day, saying he ought to go. we should not be rejecting claims for more security. we need more marines in benghazi. there were requests for extra security, those requests were not honored. this was the anniversary of 9/11. it was libya, a country we knew we had al qaeda there. al qaeda and its affiliates are on the rise in northern africa. we did not give our ambassador in benghazi a marine detachment. we should not apologize for our values.
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look at all the various issues out there. the vice president talks about sanctions in iran. >> i would like to move to iran. there is really no bigger national security issue in this country. both president obama and governor romney said it will prevent iran from getting nuclear weapons even if that means military action. last week, former defense secretary said a strike on iran's facility would not work and could prove catastrophic, haunting us for generations. can the two of you be absolutely clear and specific to the american people how was that would military strike be? >> we cannot allow iran to gain nuclear weapons capability. let's take a look that where we have come from.
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when barack obama was elected, they had enough material to make one bomb. now they have enough for five. they are four years closer towards nuclear weapons capability. we have had four different sanctions. the only reason we got it was because of russia watered it down. mitt romney proposed these sanctions in 2007. the administration was blocking us every step of the way. only because we had strong bipartisan support for these tough sanctions were we able to overrule the objections and put them in in spite of the administration. look at what they are doing. they're stepping up their terrorist attacks. they tried a terrorist attack in the united states last year. talk about credibility.
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when this administration says all options are on the table, they send all these mixed signals. in order to solve this peacefully, you have to have the ayatollahs change their minds. look at where they are. it is because this administration has no credibility on this issue. this administration watered down sanctions. now we have been in place because of congress. the military option is not being viewed as credible. make sure we have credibility. under a romney administration, we will have credibility. >> incredible. do you think there is any possibility the entire world would have joined us? russia and china? these are the most crippling sanctions in the history of sanctions.
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period. when the governor is asked about it, he said, we have to keep the sanctions. you're going to go to war? the interesting thing, how are they going to prevent war? there is nothing more they'd say we should do than what we have already done. with regard to the ability of the united states to take action militarily, it is not in my purview to talk about classified information. we feel quite confident we could deal a serious blow to the iranians.
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the iranians are -- the israelis and united states intelligence communities are the same exact place in terms of how close the iranians are to getting a nuclear weapon. there is no difference between our view and theirs. when my friend talks about material, they have to take this highly enriched uranium, then they have to be able to have something to put it in. there is no weapon the iranians have at this point. both the israelis and we will know if they start the process. all this bluster i keep hearing, what are they talking about? are you talking about to be more credible? what more can the president do? directly communicate to the ayatollah. we will not let them to acquire a nuclear weapon. >> let's look at this from the view of the ayatollahs. what do they see? they see this administration trying to water down sanctions in congress for over two years. they're moving faster toward a nuclear weapon. they see us saying, we need more space for their ally israel.
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they see president obama in new york city the same day -- instead of meeting netanyahu, goes on a daily talk show. when we say that these options are on the table, the secretary of defense walked them back. they are not changing their minds. that is what we have to do, change their minds. >> you both saw benjamin netanyahu hold up that picture of obama with a red line and talking about the red line being in spring. can you solve this? if you are elected, can you solve this in two months before spring and avoid -- >> we can debate the timeline.
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i agree that it is longer. we both agreed that to do this peacefully, you have to get them to change their minds. they are not changing their minds. >> the ayatollah sees an economy being crippled. 50% fewer exports of oil. the currency is going in the tank. he sees the economy going into free-fall. he sees the world totally united in opposition. the president has met him a dozen times. he has spoken to netanyahu as much as he has spoken to anybody. just before he went to the un, i was in a conference call with the president talking for well over an hour. stark detail about what was going on. >> what does that mean? >> the irish call it malarkey.
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we will not allow the iranians to get a nuclear weapon. when they get to the point where they can enrich uranium in half to put into a weapon, they do not have a weapon to put it into. calm down. iran is more isolated today than when we took office. it is totally isolated. i do not know what world these guys are in. >> in spite of their opposition. they had given 20 waivers to this section. all i have to point to our results.
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>> can you tell the american people -- >> they are closer to being able to get another -- enough material to put it in a weapon if they had a weapon. facts matter, martha. you are a foreign policy expert, facts matter. all of this loose talk, not true. not true. if we ever have to take action, we will have the world behind us. that matters. that matters. >> what about bob gates? let me read it again. "could prove catastrophic, haunting us for generations." >> he is right. >> it undermines our credibility by backing up the point where we make it or all options are on the table.
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the ayatollahs see these kinds of statements and they think, i am going to get a nuclear weapon. when we see the kind of equivocation that took place because this administration wanted a precondition policy, they were silent for nine days. when they see us putting daylight between ourselves and our allies in israel, that gives them encouragement. when they see russia watering down any further sanctions, the only reason we got a u.n. sanction was because russia watered it down. when they see this type of activity, they are encouraged to continue. >> let me ask you what is worse, war in the middle east or nuclear arms iran? >> a nuclear arms iran, which triggers a nuclear arms race in the middle east. this is the world's largest sponsor of terrorism. they call us the great satan. if they get nuclear weapons, other people in the neighborhood
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will pursue their nuclear weapons as well. >> war should always be the absolute last resort. that is why these crippling sanctions -- if i am not mistaken, governor romney says we should continue. i may be mistaken, he changes his mind so often, i could be wrong. he says they're working. they are being crippled by them. we have made it clear, big nations cannot bluff. this president does not bluff. >> the number-one issue here at home is jobs. the percentage of unemployed just fell below 8% for the first time in 43 months. the obama administration had projected that it would fall
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below 6% after the addition of close to a trillion dollars in stimulus money. will both of you level with the american people? can you get unemployment to under 6%? how long will it take? >> we can and we will. let's look at where we were when we came to office. the economy was in freefall. we had the great recession. 9 million people lost their jobs. $1.60 trillion in wealth lost, equity in your homes, retirement accounts. we immediately went out and rescued general motors. we went ahead and made sure we cut taxes. in addition to that, when that occurred, what did romney do? let detroit go bankrupt. for a guy who says 47% of the american people are unwilling to take responsibility.
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my friend recently gave a speech to washington state, 30% of the american people are takers. these people are my mom and dad. they are elderly people who are living off social security. there are veterans and people fighting in afghanistan right now who are "not paying any taxes." it's about time they take some responsibility. instead of signing pledges to grover norquist, they should be signing a pledge saying to the middle class, we will level the playing field. we will give you a fair shot again. we will not repeat the mistakes we made in the past by having a different set of rules for wall street and main street, making sure we continue to hemorrhage these tax cuts for the super wealthy.
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they are holding hostage the middle class tax cut because they say we won't continue the middle class tax cut unless you give the tax cut for the super wealthy. it is about time they take some responsibility. >> joe and i are from similar towns. do you know what the unemployment rate in scranton is today? 10%. that is how is going all around america. >> that is not how it is going. it is going down. >> did they inherit a tough situation? absolutely. but we're going in the wrong direction. the economy is barely limping along.
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job growth in september was slower than it was in august and august was slower than it was in july. we're heading in the wrong direction. 23 million americans are struggling for work. 15% of americans are living in poverty. this is not what a real recovery looks like. we need real reforms for a real recovery. that is exactly what we are proposing. get america energy independent by the end of the decade. get this deficit and debt under control. make trade work for america. champion small businesses, do not raise taxes on small businesses. they are our job creators. he talks about detroit. mitt romney is a car guy. this is a guy who -- i was talking to a family in
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massachusetts the other day. their kids were hit in a car crash. two of them were paralyzed. they went to the same church. mitt asked if he could come over on christmas. he brought his boys and his wife and gifts. i know you are struggling, do not worry about college, i will pay for it. mitt romney does not tell these stories. it was not the cash, he gave his time, and he has consistently. this is a man who gave 30% of its income to charity, more of the two of us combined. he is a good man. he cares about 100% of americans in the country. the vice president knows that sometimes the words do not come out of your mouth the right way. [laughter]
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>> i always say what i mean. >> we want everybody to succeed. we want to get everybody out of poverty. we believe in opportunity. that is what we're going to push for. >> i have a feeling you have a few things to say. >> the idea, if you heard that soliloquy on 47%, that he just made a mistake, i have a bridge to sell you. i do not doubt his personal generosity. when i was a little younger than the congressman, my wife was in an accident. killed my daughter, and my two sons survived. i have sat in the homes of many people. to know they know you have been through it, that they can make it.
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i do not doubt his personal commitment to individuals. but do you know what? he had no commitment to the automobile industry. he said, let it go bankrupt. all this talk, we saved a million jobs. 200,000 people are working today. i have never met two guys more down on america across the board. 5.2 million new jobs. we need more, but 5.2 million. if they would get out of the way and let us pass the tax cuts, pass the jobs bill, just get out of the way. stop talking about how you care about people. show me something. show me a policy where you take responsibility.
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by the way, they talk about this great recession like it fell out of the sky. i was there. we cannot afford that. all of a sudden, these guys are so seized with the concern about the debt. >> let's not forget that they came in with one-party control. when barack obama was elected, his party controlled everything. they had the ability to do everything of their choosing. they passed the stimulus. the idea that we could borrow $831 billion and spend it on all of these special interest groups and would work out just fine. they said if we just passed the stimulus, the economy would grow at 4%.
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it is growing at 1.3%. >> when could you get below 6%? >> that is what our entire premise is about. look at the $90 billion in stimulus. the vice-president was in charge of overseeing this. $90 billion to campaign contributors and special interest groups. the department of energy, over 100 criminal investigations. >> an investigative committees spent months and months. they found no evidence of cronyism. i love my friend. i am not allowed to show letters, but go on our website. he sent me two letters, by the way, can you send me some stimulus money for companies in the state of wisconsin? >> you did ask for stimulus,
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correct? >> constituents applying for grants. we did that for all constituents. >> i love that. that is a bad program and he writes me a letter. the reason we need this stimulus, it will create growth and jobs. his words. and now he is sitting here -- by the way, that program, what the congress said was that it was a model. all this talk about cronyism. they investigated and did not find one single piece of evidence. i wish he would just -- >> was it a good idea to spend taxpayer dollars on windmills in china? was it a good idea to borrow all this money from countries like china and spend it on all these different interest groups? >> it was a good idea that this was exactly what we needed to stop us from going off the cliff.
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4% of those green went under. it is a better batting average that investment bankers have. >> where are the 5 million green jobs? >> i want to move on to medicare and entitlements. >> any letter you send me, i will entertain. >> both medicare and social security are going broke and taking a larger share of the budget. will benefits for americans under these programs have to change for the programs to survive? >> absolutely. medicare and social security are going bankrupt. when i look at these programs, we have all had tragedies in our lives, i think about what they have done for my own family. my mom and i had my grandmother move in with us who was facing alzheimer's. medicare was there for her. after my dad died, my mom and i
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got social security survivors' benefits. it helped her to go back to college in her 50s. she started a small business. she paid all her taxes on the promise that these programs would be there for her. we will honor this promise. if you reform these programs for my generation, you can guarantee they don't change for people near retirement. that is what mitt romney and i are proposing. look what obamacare does. obamacare takes $716 billion from medicare to spend on obamacare. even their own chief actuary of medicare backs this up. you cannot claim that this money goes to medicare and obamacare. and then they put this new obamacare board in charge of cutting medicare each and every year. this board is 15 people. not one of them even has to have medical training.
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social security, when the program goes bankrupt, a 25% across-the-board benefit cuts kicks in on current seniors in the middle of their retirement. we will stop that from happening. they have not put a credible solution on the table. he will tell you about the vouchers. he will say all these things to try to scare people. give younger people guaranteed coverage options. you cannot be denied, including traditional medicare. more coverage for middle income people and total coverage for the poor and sick. >> i heard that the death panel
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argument from sarah palin. let's talk about medicare. we saved $716 billion and put it back into medicare. we cut the cost to medicare. we stopped overpaying insurance companies. the ama supported what we did. aarp supported what we did. they want to wipe this out. it also gave more benefits, any seniors out there, did you have more benefits today? you do. you get wellness visits without copays. guaranteed benefits. it is a voucher. when they first proposed -- the cbo said it would cost $6,400 a
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year more for every senior 55 and below when they got there. he knew that. yet he got all the guys in congress to vote for it. governor romney said, i would sign it. who do you believe? the ama, me, or somebody who would put in motion a plan that knowingly adds $6,400 a year more to the cost of medicare? now they have a new plan. trust me, it will not cost you any more. folks, follow your instincts. with regard to social security, we will not privatize. if you listened to mitt romney and the congressmen during the
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bush years, imagine where all of those seniors would be now if the money had been in the market. their ideas are old and their ideas are bad and eliminate the guarantee of medicare. >> they got caught with their hands in the cookie jar turning medicare into a piggy bank for obamacare. their own actuary came to congress and said, one out of six hospitals and nursing homes are going to go out of business as a result of this. 7.4 million seniors are projected to lose the medicare coverage they have. >> more people signed up for medicare advantage after the change. >> i know you are under a lot of duress. >> do not take all of the four minutes. >> do not change benefits for people 55 and above. >> let me ask you this. what is your specific plan for
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seniors who really cannot afford to make the difference in the value of what you called a premium support plan and others called a voucher? >> by taking down the subsidies for wealthy people. this is a plan. $6,400 was misleading then and it is totally inaccurate now. this is a plan that is bipartisan. i put it together with a prominent democrat senator. >> there is not one democrat who has endorsed that. >> we put it together with the former clinton budget director. here is the point. if we do not fix this soon, current seniors get caught. 10,000 people are retiring every single day.
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>> if we just allow medicare to bargain for the cost of drugs, that would save $156 billion right off the bat. folks, all you seniors, have you been denied choices? have you lost medicare advantage? >> if it could help solve the problem, why not very slowly raise the medicare eligibility age by two years? >> i was there when we did that with social security in 1983. i was one of eight people negotiating with president reagan. we all got together and everybody said as long as everybody is in the deal, and everybody is making some sacrifice, we can find a way. we made the system solvent to 2033.
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we will not be part of any voucher plan eliminating -- the doctor says, mom, when you are 65, shop for the best insurance, you are out of medicare. it will not keep pace with health care costs. if it did keep pace, there would be no savings. that is why they go to the voucher. we will be no part of the voucher program or the privatization of social security. >> nobody is proposing that. barack obama, four years ago, if you do not have any fresh ideas, use scare tactics to scare voters. if you do not have a good record, paint your opponent as someone people should run from. >> what we said then and what i
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have always agreed, let younger americans have a voluntary choice of making their money work faster for them. what we are saying is no changes for anybody 55 and above. the kind of changes we're talking about for younger people, do not increase the benefits for wealthy people. >> quickly, vice president. >> all the studies show if we went with social security proposal made by mitt romney, if you are in your 40's now, you will pay $2,600 less in social security. the idea of changing, to cut the benefits for people without taking other action to maket work, it is absolutely the wrong way.
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these guys have not been big on medicare from the beginning. their party has not been big on medicare from the beginning. they have always been about social security as little as you can do. who do you trust on this? a man who introduced a bill that would raise it $6,400 a year, knowing it and passing it? or me and the president? >> that was completely misleading. this is what politicians do when they do not have a record to run on. >> medicare beneficiaries -- >> we are going to move on. >> medicare and social security did so much for my own family, we will not jeopardize this program.
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>> you are changing the program from a guaranteed benefit. people are going to have to pay more money out of their pockets. >> gentlemen. i would like to move on to a very simple question. something tells me i will not get a very simple answer. if your ticket is elecd, who will pay more in taxes? who will pay less in taxes? >> middle-class will pay less and people making a million dollars or more will begin to contribute slightly more. the continuation of the bush tax cuts, we are arguing the bush tax cuts for the wealthy should be allowed to expire. $800 billion of that goes to people making a million dollars. we see no justification for those -- they are patriotic
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americans, they are not suggesting the tax cut. 120,000 families will get an additional $500 billion in tax relief in the next 10 years. their income is an average of $8 million. we want to extend the middle class tax cuts permanently. these guys will not allow us to. we say, let's have a vote. they are holding hostage the middle class tax cut to the super wealthy. all the studies point out will get another $250,000 a year to those 120,000 families and raise
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taxes for families who are middle income with a child by to $2000 a year. this is unconscionable. there is no need for this. the middle class got knocked on their heels. the great recession crushed them. the last people who need help are 120,000 families for another $500 billion tax cut. >> our entire premise is to grow the economy and create jobs. it is a plan that is estimated to create 7 million jobs. we think the government taking 20% of the families and businesses income is enough. president obama thinks the government ought to be able to take as much as 44.8%. if you tax every person and successful small-business making over $250,000 at over 100%, you can only run a government for 98 days.
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there are not enough rich people and small businesses to tax to pay for all their spending. the next time you hear them say, do not worry about it, watch out, middle-class, the tax bill is coming to you. that is why we are saying, eight out of 10 businesses, they file their taxes as individuals, not as corporations. near where i come from, the canadians dropped their tax rate to 15%. the average tax rate on businesses is 25%. the president wants the top tax rate to go above 40%. two-thirds of our jobs come from small businesses. it does not pay for 10% of the
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deficit spending increases. lower tax rates across the board and close loopholes. we have three bottom lines. do not raise the deficit, do not raise taxes on the middle class, do not lower the share that is borne by the high income earners. it has been discredited by six other studies and even their own deputy campaign manager acknowledged that it was not correct. >> let's talk about this. you have refused to offer specifics on how you would pay for that 20% across the board. do you actually have the specifics or are you still working on it? >> different than this administration, we want to have a big bipartisan agreement.
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>> do you have the specifics? >> look at what ronald reagan and tip o'neill did. we raise about $1.20 trillion through income taxes. we forgo about $1.10 trillion in loopholes and deductions. deny those loopholes and deductions to higher income tax payers. so we can lower tax rates across the board. >> i hope i am going to get time to respond. >> we want to work with congress on how best to achieve this. >> no specifics. >> lower tax rate 20%. start with the wealthy. >> you guarantee that this math adds up.
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>> let me have a chance to translate. i was there with ronald reagan. he gave specifics in terms of tax expenditures. 97% of the small businesses make less than $250,000. hedge funds that make $600 million a year. let's look at how sincere they are. governor romney on "60 minutes," 10 days ago, was asked, you pay 14% on $20 million. someone making $50,000 pays more than that. do think that is fair? he said, yes, that is fair. you think these guys are going to cut those loopholes? the biggest loophole they take advantage of is that carried interest loophole and capital gains loophole.
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there is not enough -- the reason why the american enterprise institute study, the reason they all say it is going to go up for the middle class, the only way you can find $5 trillion in loopholes is cut the mortgage deduction for middle-class people. cut the health care deduction for middle-class people. that is why -- >> he is wrong about that. >> not mathematically possible. >> it has been done before. >> it has never been done before. >> it has been done a couple of times. >> now you are jack kennedy. [laughter] >> republicans and democrats have worked together on this. i understand you guys are not used to doing bipartisan deals.
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that is how you get things done. >> the republican congress working? 7% rating? >> mitt romney was governor of massachusetts. he did not demonize them, he did not demagogue them. he met with those party leaders every week. he did not compromise principles. he balanced the budget. >> why isn't he contesting massachusetts? >> what would you suggest beyond raising taxes on the wealthy? >> let the taxes expire like they were supposed to on these millionaires. we cannot afford $800 billion going to people making a minimum of a million dollars. they do not need it, martha.
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those 120,000 families make $800 million a year. why is my friend -- >> can you declare anything off-limits? home mortgage deductions? >> this taxes a million small businesses. >> 97% of the small businesses make less than $250,000 a year. >> this taxes a million people. >> 97%. >> and you're going to increase -- >> we are not going to cut the defense budget.
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>> no massive defense increase? how do you do that? >> a proposed $478 billion cut to defense. now we have another $500 billion cut defense that is working on the horizon. they insisted upon that being involved in the debt negotiations. >> no one wants that, but i want to know how you do the math. >> you do not cut the defense by a trillion dollars. we will cut 80,000 soldiers, 20,000 marines, 120 cargo planes. if these cuts go through, our navy will be the smallest it
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has been since before world war i. this invites weakness. do we believe in peace through strength? you bet we do. do not cut the military by a trillion dollars. not increase it by a trillion, do not cut it by a trillion. >> we do not cut it. this so-called automatic cut, that was part of the debt deal they asked for. let me tell you what my friend said at a press conference. we have been looking for this moment for a long time. >> can i tell you what that meant? >> the bipartisanship was what he voted for the automatic cuts in defense because they did not act. the military says, we need a smaller army. we need more special forces. we do not need more tanks.
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that was the decision of the joint chiefs of staff. recommended to us and agreed by the president. >> i would like to get into afghanistan. that is one of the biggest expenditures this country has made. we just passed the sad milestone of losing 2000 u.s. troops. more than 50 of them were killed by the very afghan forces we're trying to help. we have reached the recruiting goal for afghan forces. tell me, why not leave now? what more can we accomplish? is it worth more american lives? >> we do not want to lose the gains we have gotten. we want to make sure the taliban does not come back in
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and give al qaeda a safe haven. when i think about afghanistan, i think about the incredible job our troops have done. you have been there more than the two of us combined. the first time i was there, it was amazing to me what they were facing. i went to the argonaut valley before the surge, i sat down with a young private who would tell me what he did every day. to see what they had in front of them. to go back in december, to see what they had accomplished, it is nothing short of amazin what we do not want to do is lose the gains we have gotten. we have disagreed on a few issues. we would have taken into account the recommendations from our commanders, general petraeus, on troop levels. we have been skeptical about negotiations with the taliban. especially while they are shooting at us.
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but we want to see the 2014 transition be successful. we want to make sure our commanders have what they need to make sure it is successful. >> martha, let's keep our eye on the ball. i have been to afghanistan and iraq 20 times. i have been throughout that whole country. we went there for one reason. to get those people who killed americans. al qaeda. we decimated al qaeda central. we have eliminated osama bin laden. that was our purpose. in the meantime, what we said we would do, we would help train the afghan military. it is their responsibility to take over their own security. that is why, with 49 of our allies in afghanistan, we have agreed on a gradual drawdown. we're out of there in the year 2014.
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it is based on conditions. it does not depend for us. it is the responsibility of the afghans to take care of their own security. we have trained over 315,000, mostly without incident. there have been more than two dozen cases of green on blue. if the measures the military has taken do not take hold, we will not go on joint patrols. we will only train in the army bases that exist there. we are leaving. we are leaving in 2014, period. but then in the process we will be saving another $800 billion. we have been in this war for
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over a decade. the primary objective is almost completed. we are putting the kabul government in a position to maintain their responsibility. it is their responsibility, not a americans. >> what conditions could justify staying? >> one of my best friends in jamesville is at an operating base in afghanistan right now. our wives and daughters are best friends. i want him and all of our troops to come home as soon and safely as possible. we want to make sure we give our commanders what they say to make it successful. if it wasn't just this, i feel like we would be -- if it was just this, i feel like we would be able to call it successful. we turn on our televisions and
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see the unraveling of the obama foreign-policy. problems are growing abroad, but jobs are not growing at home. >> he says we are absolutely leaving in 2014. you are saying that is not an absolute. >> do you know what we say that? we do not want to broadcast to our enemies, put a date on their calendar, wait us out, and come back. we do agree with the timeline and the transition. what any administration will do in 2013 is access the situation to see how to deal with the timeline. we do not want to give our allies reasons to trust us less and we do not want to emboldened our enemies to hold and wait out for us.
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>> that is a bizarre statement. 49 of our allies signed on to this position. 49. of 49 said out in 2014. that is the responsibility of the afghans. >> we have afghan forces murdering our forces over there. the taliban, the thing they are taking advantage of this time line? >> what we saw in iraq, unless you set a time line, they will not step up. they're happy to let us continue to do the job. the only way they step up is to
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say, fellows, we are leaving. we have to train you, step up. >> let me go back to the surged troops. you brought this up. i have talked to a lot of officers who were concerned that the surge troops were pulled out. some of them saw that as a political movement. can you tell me, what was the military reason for bringing them home? >> when the president announced the surge, you will remember he said the surge will be out by the end of the summer. the military said the surge will be out. there is nothing political about this. before the surge occurred, we said that they will be out by the end of the summer. that is what the military said. >> the military follows orders.
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there are people concerned about pulling out -- >> there are people concerned, but not the joint chiefs. that was their recommendation to the president. i sat there. i am sure you will find somebody who disagrees within the pentagon. that is not the case here. the reason the military said that is, you cannot wait and have a cliff. it takes months and months to draw down forces. >> i think this can get a little confusing. we have all met with general allan. the taliban and the terrorists come over from pakistan to fight our men and women. when it is frozen with snow,
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they cannot do it. and in the warm months, fighting gets really high. when general petraeus said if people these people out, it puts us more at risk, that puts us at more at risk. the remaining troops that still have the mission to prosecute are doing it with your people, that makes them less safe. we are sending fewer people out and all of the hot spots to do the same job they were supposed to do a month ago. >> we turned them over to the afghan troops we trained. nobody was pulled out of that did that get to build an by trained afghan personnel. he is conflating two issues. the fighting issue that the general petraeus was talking about was the fighting season this spring.
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>> the calendar works the same every year. >> it does work the same every year. >> it is warm or it is not. they're still fighting over us and coming over the passes. there are still coming over to all of these areas. we are still sending fewer people to the front to fight to them. >> that as the afghan responsibility. we have trained them. >> not in the east. >> the east is the most dangerous place -- >> that is why -- >> you would remove -- you would whether americans be doing the job? >> fewer of them. >> we are sending in more afghans to do the job. >> let's move to the civil war in syria or there are estimates that over 25,000 or 30,000
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people have been killed. in march president obama explained the military action taken in libya saying it was in the national interest to prevent further massacres from occurring there. why does the same logic not apply in syria? >> it is a different country. it is five times as large a geographically. it has one-fifth the population of libya. it is a part of the world it would not see whatever come from that war to seep into a regional war. you are in a country heavily populated in the midst of the most dangerous area of the world. if it blows up and it the wrong people gain control, it will have impact on the entire region causing potentially regional wars. we are working with the turks,
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the jordanians, the saudis and with all the people i in the region trying to identify the people who deserve the help so when assad goes, there will be a legitimate government that follows on. all of the loose talk of my friend, governor romney and the congressman, about how we could do so much more. what more would they do other than put american boots on the ground? the last thing america needs is to get into in the ground war in the middle east requiring a hundred thousand american forces. they are the facts. every time the american -- every time the governor is asked about this, he goes up with a whole lot of the verbiage. when he gets pressed, he says he would not do anything different
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that we are doing now. are they proposing putting american troops until the ground? they should speak up and say so. that is not what they are saying. we are doing it exactly like we need to do to identify those forces who in fact will provide for stable government and not cause a regional suni shiite war when assad falls. >> nobody is proposing sending american troops to syria. we would not refer to asad as a reformer when he is killing his of civilians. we would not be outsourcing our foreign policy to the united nations giving vladimir putin veto power over our efforts with this issue. hillary clinton went to russia to try to convince him not to
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do so. she said they are on the wrong side of history. she is right about that. where are we? after international pressure mounted, and has been over one year, the man has slaughtered tens of thousands of his own people, more fighters are spilling into the country. the longer this is going on, the more groups like al qaeda are going in. we could have more easily identified a free syrian army working with our allies, the turks, had we had a better plan in place to begin with working through our allies. we waited to try to come up with an agreement with the un, that bought assad time. meanwhile, 30,000 syrians are
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dead. >> what would my friend do differently? if you notice he never asks -- he never answers a question differently. >> you do not go through the un. >> we have been in the process for months making sure humanitarian aid and other training is getting through to those forces we believe, the turks believe, the jordanians believe, the saudis believe are the free forces inside of syria. our allies were all on the same page. nato as well as our arab allies in trying to get a settlement, that was their idea. we are the ones that said enough. with regard to the reset not working, the fact of the matter is russia has a different interest in the syrian that we do and that is not in our interest. >> what happens if assad does not fall?
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>> iran keeps their greatest ally in the region. he will keep slaughtering his people. we will lose our credibility on this. >> what would romney/ryan do? >> we agree with chemical weapons, but not about putting troops in. what we should have done earlier is work with those freedom fighters, those in syria. we should not have called assad a reformer. we should not have voided for russia to give us the green light at the u. n. they are still arming the man. they are flying flights over iraq to help assad. if we had the agreement he said
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about ira, we probably would have prevented that. >> let me ask you quickly what is your criteria for intervention. >> in syria? what is in the interests of the american people. >> no humanitarian. >> each situation will come up with its own set of circumstances. putting american troops on the ground, that has to be within the national security interests of the american people. embargoes and sanctions -- those are things that do not put american troops on the ground. if you are talking about putting troops on the ground, only in our interests. >> i want to return home for the last few questions. this debate is historic. we have two catholic candidates, first time on a
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stage such as this. i would like to ask you both to tell me what role your religion has played in your own personal views on abortion. please talk about how you came to that decision. talking about how your religion played a part in that. this is such an emotional issue for so many in this country. please talk personally about this if you could. >> i do not see how a person can separate their personal life from their public life and their faith. our faith informs us and everything we do. it informs me of how to make sure people have a chance in life. if you want to ask why i am pro-life, it is not simply because of my catholic faith. that is a factor of course. it is also because of reason and science.
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i think about 10 and a half years ago, my wife jan and i went to mercy hospital where i was born for our seventh week ultrasound for our firstborn child. we saw the heartbeat. our little baby was in the shape of the been. -- of a bean. to this day, we have nicknamed our firstborn child "bean." i believe life begins at conception. those are the reasons i am pro- life. i understand this is a difficult issue. i respect people who do not agree with me on this. the policy of a mitt romney administration is to oppose abortion with the exceptions for a rape and the life of the mother. what troubles me more is how this administration has handled all of these issues. look at what they are doing through obamacare with respect
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to assaulting the religious liberties of this country. they are infringing upon our first free them. -- freedom. the freedom of religion by infringing on catholic charities, churches, catholic hospitals. our church should not have to sue the federal government to maintain religious liberties. with respect to abortion, the democratic party used to sit want to be safe, legal, and rare. now the support it without restrictions and tax payer funding. the vice president himself went to china. he said he sympathized or would not second-guess their one child policy of forced abortions and sterilizations. that to me as pretty extreme. >> my religion defines who i am. i have been a practicing catholic my whole life. it has informed my social
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doctrine. it talks about taking care of those who cannot take care of themselves. people who need help. with regard to a abortion, i accept my church's position on abortion as a doctrine. i refuse to impose it on the equally devout christians and muslims and jews -- i refuse to impose that on others of like my friend here, the congressmen. i do not believe we have a right to tell other people -- other women they cannot control their bodies. i will not interfere with that. with regard to the assault on the catholic church, let me make it clear.
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no religious institution, catholic or otherwise, including catholic social services, any hospital, none has to be there refer contraception, none has to pay for contraception, and that has to be a vehicle to get contraception until any policy they provide. that is a fact. with regard to the way in which we differ, my friend says -- i guess he accepts governor romney's position now. in the past he has argued there is a rape, forcible rape, in the case of rape or it would be a crime to engage in having an
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abortion. i fundamentally disagree with my friend. >> all i am saying is if you believe life begins at conception, that does not change the definition of life. that is a principle. the policy of a romney administration is to oppose abortions with exceptions for rape,, and life of the mother. i have to take issue with the catholic church and religious liberty. if they agree with you, why would they keep suing you? >> i want to go back to the abortion question. if the romney-ride ticket is elected, should those who believe abortion is legal be worried? >> we do not believe judges should make the decision that people through their elected representatives and a consensus through the democratic process to make the determination. >> the next president will get one or two supreme court nominations. that is how close roe vs wade is.
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who do you think he is likely to appoint? do you think he is likely to appoint somebody like judge scalia or somebody who would outlaw abortion? i suspect that what happened. i guarantee that will not happen. we pay people open-minded. they have been good justices. >> was there a litmus test on that? >> we picked people with an open mind and who did not come with an agenda. >> i will move on to disclose in question because we are out of time. you have said the two of the respect our troops enormously. your son has served, and perhaps someday your children will serve as well. i recently spoke to a highly decorated soldier who said this presidential campaign has left
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him this made. -- dismayed. he told me the ads are so negative and all tearing down each other rather than building of the country. what would you say to the american hero about the campaign? at the end of the day, are you ever embarrassed by the tone? >> i would say, we only have one truly sacred obligation as a government to equip those we sen in harm's way and care for those who come home. that is the only sacred obligation that we have. everything else falls behind that. i would also tell him the fact that he, this decorated soldier, fought for his country, that should be honored. he should not be thrown into a category of a 47% who did not fight -- do not pay their taxes
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while he was fighting and somehow not taking responsibility. i would also tell him there are things that have occurred in this campaign that i am sure both of us regret having said, particularly in the special, new groups that go out there and raise all of the money they want, they can say the most scurrilous things about the other candidate. it is an abomination. the bottom line is, that he wrote you have reference, take a look at whether governor romney or president obama has the conviction to help lift up the middle class, restore them to where they were before the recession hit and they were wiped out or whether they will continue to focus on taking care of only the wealthy and not ask them to take any part in paying the deal of bringing back the middle class of the country.
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i would ask them to take a look at whether the president has acted wisely in the use of force and whether a not -- whether or not the comments made by governor romney served our interests very well. there are things that have been said in campaigns that i find it not very appealing. >> i would first of all thank him for doing a service to our country. i say we will not impose devastating cuts to our military never compromise their safety. i would say you have a president to ran four years ago promising hope and change who has turned this campaign into attack, blame, and in the same. if you do not have a good record to run on, then you paint your opponent as somebody to run from. that is what president obama said in 2008, that is what he is doing now.
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look at the string of broken promises. if you like your health care plan, you can keep that. try telling that to the millions of people who are projected to lose it. remember when he said this, i guarantee if you make less than $250,000 your taxes will not go up. 12 of the tax increases in obamacare went to the middle class. remember when he said, i promise by the end of my first term i will cut the deficit in half? we have had four deficits. a debt crisis is coming. we cannot keep spending and borrowing like this. we cannot keep spending money we do not have. leaders fix problems. president obama has not put a credible plan on the table in any of his four years.
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i passed two budgets to deal with this. mitt romney has put suggestions out. we ask for a plan, they sent a press secretary. they give us a copy of the speech appeared be asked with the plan was to prevent a debt crisis. they said, a speech. we cannot estimate speeches. that is what we get, speeches. we are not getting leadership. mitt romney is qualified to fix the problems. his lifetime of experience is, what do we have for a president? as proven track record of bipartisanship and what would we have from the president? what i would tell him as we did not have to settle for this. we can do better for this. >> i hope i will get equal time. >> will get just a few seconds
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really. >> the two budgets the congressman has introduced have even serrated all of the things the middle-class has cared about. it will kick 200,000 children off of early educated. it will eliminate the tax credit people have to send children to college. it cuts education by $450 billion. it does virtually nothing except continue to increase the tax breaks to the wealthy. we've had enough of this. the idea that he is so concerned about the deficits, he voted to put two wars on a credit card. >> we're going to closing statements in a minute. >> our budget, we have not -- >> i want to talk to you very briefly before we go to closing statements about your own personal character. if he were elected, what could be both give to this country as
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a man, a human being, that nobody else could it? >> honesty. no one else could? there are plenty of fine people that could lead this country. there are people who say when they are going to do something, they go do it. what you need is one people see problems, they offer solutions to fix the problems. we're not getting that. we can grow the economy faster, that is what our five-point plan is all about. it is about getting people out of poverty into the middle class. that is about going with proven pro-growth policies that we know work getting people back to work. working with democrats -- that actually works sometimes. >> will we get to the issue of
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what you could bring as a man, and a human being? >> he gets 40, i get 15. >> he did not get 40. >> my record stands for itself. i never say anything i did not mean. everybody knows whatever i say, i do. my whole life has been devoted to leveling the playing field for a middle-class people, treating main street and wall street the same. look at my record. it has been all about the middle class. they are the people who grow this country. we grow this country from the metal out, not from the top down. >> we turn to the candidates for their closing statements. >> let me say at the outset, i want to thank you for doing this. the fact is, we are at enter a situation where we inherited a got awful circumstances. people are in real trouble. we acted to bring relief to people who need the most help
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now. in the process, in case you have not noticed, we have strong disagreements. you have probably detected my frustration with their attitude about the american people. my friend says 30% of the american people are takers. romney points out 40% of the people will not take responsibility. he is talking about my mother and father, my neighbors in scranton. he is talking about the people who built this country. all they are looking for is an even shot. whenever given the shot, they have done it. whenever you level the playing field, they have been able to move. the president and i are not going to rest until the plane field is level, they have a clear shot, and peace of mind. until they can turn to their kid and said, honey, it will be
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ok. that is what this is all about. >> i want to thank you as well, martha. i want to thank you, joe. it has been an honor to engage in the critical debate. we face a very big choice. what kind of country are we going to be? what kind of country are we going to give our kids? president obama had his chance. he made his choices. his economic agenda, more spending, borrowing, higher taxes, a government takeover of health care -- it is not working. it has failed to create the jobs we need. 23 million americans are looking for work today. 15% are in poverty. this is not what a real recovery looks like. you deserve better. mitt romney and i want to earn your support. we are offering real reforms for a real recovery for every
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american. mitt romney, his experience, his ideas, his solutions is uniquely qualified to get the job done. at a time we have a jobs crisis until a america, would it not be nice to have a job creator in the white house? the choice is clear. a stagnant economy that promotes more government dependency, or a dynamic growing economy that provides opportunity and jobs. mitt romney and i will not duck the tough issues. we will not blame others for the next four years. we will take responsibility. we will not try to replace our founding principles. we will reapply our founding principles. the choice is clear. the choice rests with you. we ask you for your vote. thank you. >> thank you both again. thank you very much. this concludes the vice- presidential debate. please tune in next tuesday for the second presidential debate
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at hofstra in new york. i do hope all of you go to the polls. have a good evening. [applause] [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute] [applause]
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>> we're opening our phone lines to get your thoughts on last night's price of president shall debate.
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-- vice-presidential debate. the numbers are on your screen. what did you hear from the debate? we will take our first call from leesburg, florida, on the democratic line. turn your tv down. caller: hello? host: go ahead. you're on the air. caller: -- host: one more time. all right. moving on to chris in columbus.
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ok. we are having problems with our phones. if you missed any of the debate, it is always available on the c- span video library. c-span.org. of candidates are on the road the day. joe biden and his wife, jill, at the university of wisconsin. romney was in richmond, va., earlier this afternoon and he will team up with paul ryan in lancaster. that is at 5:40 p.m. eastern. obama is here in washington, no public events for the president. the associated press has a quick review as we show you the numbers again to call in to give us your thoughts on the vice presidential debate. the numbers are on your screen.
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we will try again. conroe, texas, democrats line. go ahead. caller: i think vice president biden did the best job. he probably grant it to much, but i think he came out on top. host: ryan, kansas city, kan. on the republican line. caller: hello? host: go ahead. caller: we feel that congressman ryan was very thorough and detailed. he knew what he was talking about. we thought biden was just a
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typical puppet. host: did you watch the debate on c-span last night? less caller: 9:00 a.m. today, yes. -- last night and today, yes. host: independent line, go ahead. caller: something really bothers me and i think people tend to show their emotions when they do not realize it. i was not really impressed with the republican. he is a smug smartass. host: did this switch your vote
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at all? caller: i seriously think that if somebody said something that was truly of consequence, i would change my vote. right now, i'm leaning towards the republicans -- i'm sorry. i'm leaning towards the democrats, but i'm not happy about them either. i'm just not happy with the republican side of this, the smugness. host: caller: new haven, conn. -- host: new haven, keith. caller: and calling on behalf of
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the democrats. i really think biden held his ground last night. i think people were basically just preparing him for stuff that could happen. he's arrogant. we're talking about running a country here. biden, i understand a lot of things that they touched the ground on. this allowed the democrats to make a move and do what they cancel all the pieces can fall into place. lost.uy, ryan, he's it's like people have been coaching him and coaching him. he does not know what's going on. he contradicted himself once, twice, three times. he had no answers for a lot of things.
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if that's the kind people you country, so beour it. >> mount juliet, republican line. caller: yes? host: you're on the air. caller: yes, i'm calling about the fact that one thing in your last man that called, his stupidity in his answers were totally stupid when he said ryan was lost. that's all he knew how to say. i'm 75 years old. i have been watching joe biden for years with his con artistry, his laughter, and his grins after he makes his conartist comments and insults them to no end. these people that think he knows what he's doing is as stupid as
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he is. this man is one of the worst there is and the lying-est man i have ever laid my eyes on. to get up here and talk about how these people were murdered over this president than this 80 yet that was on tv last night, this is just absolutely makes me -- that this idiot that was on tv last night. we have sick idiots like this in the white house. host: stephanie on the independ ent line. caller: i watched the debates on c-span because i did not want the polls and commentary on the bottom. i just wanted to hear what the candidates were saying.
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when you listen to what they are saying it makes it very easy. one party is laying out a plan that does not give any details. them what they want to do but not how they're going to do it. i would have more respect for that party if they would give those details and let me decide. unlike the last caller, we are not stupid. americans are not ignorant. we understand what's going on. we do not need to have that funneled to was by one group or another, democratic or republican. what we need to do is go back to late time in this country where we were headed before this divisiveness god and the politics, for whatever reason. it got in there. it's bad. we sound really bad to the rest
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of the world. we need to make this about the constitution of this country, about the policies and issues that americans have always believed in and we need to leave politics out of it. host: in about 50 minutes we will go live to the qaeda institute. they have a panel institute on defense spending cuts agreed to by congress -- we will go live to the cato institute live at noon eastern. in the meantime, we will continue live with your phone calls on the vice presidential debates which we just reaired. phyllis from stanton islands. caller: thank you for taking my call. i just wanted to let you know, and the people of the united states, that i cannot believe that the vice-president would
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conduct himself like he did last night. there were so many times that we wanted to shut the tv off because we could not watch him smirking, laughing, interrupting ryan when he was speaking. what kind of vice president is he? not only that, but i watch the congressional hearing on libya and i blame -- i blame washington, d.c., from the secretary of defense all the way up to obama. they are the ones who allowed these people to be murdered. they did not care in the did not do their job. it's a disgrace. i think a biden was a disgrace when he said the next day after
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the attack that it was from a video. host: at the route of of the debate last night, we had a look in the spin room of both candidates to hear some of what their spokespeople thought about how they did. here is the spin from the biden campaign and then we will go to the ryan room. >> i heard the congressman said that they will be following through and be straight on the numbers. we did not get any answer on their tax plan, no matter how hard the moderator and the vice- president pushed. the one thing they ran away from was the $2 trillion promise that
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romney has made. he really could not explain their medicare plan and he went away from the fact that it would increase expenses on senior citizens over time. he criticized the stimulus plan, the recovery after that was instrumental in stopping the free fall the economy was in. he was sheepish when he mentioned that the congressman had written money asking for money because it would help the wisconsin economy and would create jobs. i thought congressman ryan was on the run from start to finish. the one thing he did say and the american people heard clearly is that they would not make the commitment to leave afghanistan in 2014. that's one of the only things he made clear tonight.
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i thought it was a decisive victory. >> style and tone sometimes matter more than content. >> i did not know how earnest you are when you are running away from every question you are asked. i do not think that is earnest. it looked like the principle debating against the class president. in terms of style, joe biden is joe biden. he's real. he is straight forward. he spoke from a lifetime of experience. congressman ryan spoke from what he was handed in preparing. he gave the kind of performance that you would get from the class president, but when it came to explaining about leading the country and what it would mean for the middle class, i thought he was disastrous.
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>> i think you saw that the vice president could not defend against the taxation and they could not put forward a vision for what they would do in a second term or any kind of agenda. he laid out a very clear agenda when it comes to the budget and our trade policy. there are two very clear choices here to choose from going forward. he made a very solid case from vice president biden. >> did it turn off voters? >> again, i think paul was very much in command. know.t
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i'd. there is a very clear contrast -- i think there is a very clear contrast. 20 million americans will lose their health insurance provided by their employers. 7.5 million americans will be affected through medicare advantage. money will be taken out of current retirees medicare to pay for obamacare. we will keep having these unemployment rates and these deficits and its a contrast to the romney-ryan agenda which would repeal an obamacare and restore the money to medicare. on all of these issues, it's a pretty clear choice for the american people. host:ed gillespie and david
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axelrod last night talking with reporters after the debate. a live picture from the cato institute. we will be back here to bring in a discussion on the economic impact of the pending defense cuts congress agreed to last summer coming up at noon eastern here on c-span. we are continuing with your phone calls on the debate. martha in maryland calling in on the democrats' line. go ahead. caller: i just wanted to comment regarding the debate. vice president biden was precise, responsive, direct. paul ryan roamed around each question failing to make a point on how his side could do better. it was all wrong. the reason why he was
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interrupted a few times was because he was telling stories and pointed out what the democrats were doing wrong but he never came to a point to tell how you would handle it. even when the moderator asked him the same question several times emphasizing to answer the question. you know, he would just run around and say nothing. anybody can open their mouth to say anything. he needed to explain what direction the country will be led by his party. host: jackson, mississippi, ernest on the independent line. caller: thank you, c-span. i missed the debate last night but i was able to get the
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coverage you had just now on the tv. here's my point. people can point their finger any way they want, but the bottom line is this. there are people who need jobs. the way i see it is republicans need to stop pointing the finger and get this fixed so people have a chance to know what's going on. the democrats -- obama-vitamin, they have done a good job so far the way i see it. -- obama- biden has done a good job. i have not seen anything in my eyes where they can actually say what they're going to do or how it's going to be done.
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where as, if you want to see the numbers, you can see economically jobs are being made. jobs are being provided. people are out there getting job than the numbers are better. that is impossible. but if people were giving up worker, the numbers would stay bad. the job is getting done. let them see what they can do. host: richmond, va., on the republican line. romney is coming there this afternoon. any plans to see him? caller: i cannot unfortunately, but i would love to. i was already in favor strongly of the republican party, but i just wanted to see how what would play out. i was shocked and disgusted by the behavior of joe biden. i thought that he was using
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laughter and smiling as a tactic to distract attention from what ryan was saying. i think there was no reason for that. that was part of his strategy. i have heard some of the other callers refer to ryan as arrogant and a know it all. the clean-cut look might not be attractive, but why would you want someone in that position without a lot of knowledge? biden there's been criticism of the republican party on not being specific on how they will implement change. repeatedly they have said here is the framework. these are the principles we stand behind. and that we want to work with
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democrats and republicans together to define the specifics as we need to, but he's not putting it out there and saying this is how it's going to be done, my way or the highway, which is typically what they get from obama. i think that brian did a much better job -- ryan did a much better job. he reflected the philosophy of the republican party, which is that government is not getting in your way and making decisions for you and taking care of everybody on everyone else's tax dollars. this is the united states. it's a free-market. democrats on the other hand say the government wants to be involved in everything. thet: we're going live to cato institute for a discussion on the economic impact of defense spending cuts.
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>> the budget control act passed by congress directs that on january 2, 2013, the obama administration must cut the defense budget by at least $55 billion and the same amount for domestic discretionary spending. the prospect of such reductions has led to assertions that they will damage the economy and increase unemployment. for example, earlier this year, senator carl levin expressed his belief that the uncertainty created by the specter of sequestration was a real threat to the economy. meanwhile, some people who see excessive government spending as a source of the stress, and so therefore expose use -- oppose using the federal government spending to stimulate the economy nevertheless oppose cuts to the pentagon budget. mitt romney asserted that a trillion dollars cut to our military will eliminate hundreds of thousands of jobs.
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the gop platform says that sequestration will result in a layoff of more than 1 million skilled workers and in later contends that a half dollars trillion of cuts to the pentagon budget would harm our national security and the struggling economy that cannot afford to lose 1.5 million defense related jobs. but others claim that the limiting pentagon spending would make resources available for more productive uses in the private sector and lower the burden on taxpayers. today's discussion will focus on two related questions. his military spending different from other forms of government expenditures? and could the impending mandatory cuts in military spending under sequestration actually benefit the economy? in august of this year, our first speaker, benjamin zycher era, examines these questions in
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this paper. hard copies are available in the foyer and on line for those watching on c-span or on the internet. let me introduce our first speaker. a senior fellow at pacific research institute and a member of the advisory board of the quarterly journal, "regulations." he was a senior fellow at the manhattan institute for policy research, a senior economist at the rand corp., and a member of the border directors of the western economic association international, and vice president for research at the milken institute, founding editor of the quarterly journal "jobs and capital," and a senior staff economist in the first two years of the reagan administration. he taught economics at ucla and at the martin smith school of business and economics at cal state. he holds a ph.d. in economics
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from the university of california los angeles and a master of public policy from uc- berkeley. our second speaker is stephen fuller, the doctor is a professor of public policy and regional development at george mason university and has been there since 1994 parody served as director of the ph.d. program on public policy from july 1998 through june of 2000 and from july 2001 to july 2002. he served as director of the center for regional analysis. he previously taught at george washington university 25 years, including nine as chairman of the department of urban planning and real estate development and as director of a doctoral programs for the school business of public management. his research focuses on the changing structure of metropolitan area economies and especially on the impact of federal spending, including two studies completed within the past year that consider the
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economic effects of sequestration. in october 2011 he focused on the impact that a reduction of $45 billion in program spending from dod would have on the economy. in july this year he published the study which considered the effects of the budget control act and sequestration on defense and non-defense spending. i'm pleased to welcome him here to the cato. let me begin by introducing benjamin zycher. then we will continue with dr. fuller. thank you very much. [applause] >> thanks, chris, i appreciate it. and thanks to cato for hosting the event and thanks to all of you for your time and attention. i want to discuss the topics. first, the simple analytics of proposed reductions in defense outlays in the context of gdp
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growth and aggregate employment. second, i want to offer a few brief comments on steve fuller's recent estimates of economic effects of cuts in defense spending, estimates that have received a substantial amount of attention recently. when i do that, i ask that you keep a straight face, steve, unlike the festivities last night. third, if you summary data on defense outlays on the relationship between defense outlays and gdp growth. what i will not discuss today is the appropriate size and composition of the defense budget. that would require a delineation of u.s. interest, vital, important, desirable, and marginal, and the required to defend them. you're not going to get into
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that today. so let me begin with a very simple thought experience. suppose the crime rate false and this might be because of a demographic shift, because of changing into leasing practices, because of higher incarceration rates. tell any story you want, but if we had an economy in which crime rates fell, you expect there to be a decline in the demand for private security services. that would represent a shift in demand and supply conditions that would be reflected in a relative prices. as a result of the relative price shift, we would observe a movement of resources across sectors, including. that would be a classic example of structural unemployment as labor and the owners of other resources find their most productive uses in a world in which economic conditions have changed. no policy maker would bemoan
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that increase in short-term unemployment caused by declines in crime rates. it's because the reduction in crime yield an increase in the actual wealth and it's entirely appropriate for there to be some short-term unemployment as labor and the owners of other resources find their most valuable uses in a world of changed economic conditions. more generally, i think we can all agree that one central purpose of a market economy is the most productive use of scarce resources in a world in which demand and supply conditions change constantly in the face of an immobile factors. that internal condition, constant change in the economic environment, is the fundamental reason that central planning cannot work, even apart from the adverse implications of central planning for individual freedom. we use market institutions to
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allocate resources because doing so maximizes aggregate wealth. we don't use market institutions to allocate and reallocate resources in order to preserve jobs in any given industry. therefore, the structural unemployment that results from reductions in defense outlays is irrelevant and politically, even if it is highly relevant politically. to the extent that reductions in defense outlays reflect an improvement in international security environments, that improvement in yields an increase in national wealth in exactly the same sense that a reduction in crime does the same. while increased employment in a given economic sector or increased unemployment, rather, in a given economic sector is painful for those subjected to economic losses, it is not a loss for the economy as a whole, because the reallocation of resources in response to changes
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in relative prices increases the aggregate productivity. let's not forget that this relocation process means automatically that resources not consumed in the provision of defense services are released for use in other sectors. among those resources is labor. so the employment losses dependent on a reduction in defense outlays automatically are coupled with employment gains elsewhere, usually with a time lag. again, reduced employment is an effective cut in defense spending is irrelevant, analytically. let me turn to the gdp reductions in defense spending. in particular i want to focus on steve's projection of the effects of the $45 billion -- $45 million cut in defense spending for fiscal year 2013. i criticize his work not because it is weak, but because it is
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too typical of that body of literature. steve projects that a defense cut of $45 billion this fiscal year would yield $164 billion reduction in direct and indirect loss or $164 billion downward change in direct and indirect sales, about a $59 billion reduction in wages and salaries, $27 billion in lost sales by subcontractors and other suppliers, the gdp loss of $86.5 billion for 2013, and a loss of more than 1 million full-time equivalent jobs. first, just in passing, there's an obvious double counting problem in steve's projections that i don't want to belabor today. more fundamentally, reduced
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employment is not an economic costs properly defined, because it's not the consumption of real resources. furthermore, resources previously used for defense can be used for other government programs or return to the private sector, resulting in increased employment in those sectors. as i read steve's analysis, it recognizes this. his model is of short-term effects. but there really is a problem empirically, his implicit multiplier effect of 1.9 is far bigger than those reported in the rest of the peer-reviewed literature, most of which report findings of 0.5to 0.8. this assumes that the concept of a government spending multiplier makes any sense at all, which i believe it does not. that is a debate for another day.
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consider the bureau of economic analysis estimates of the defense contribution of gdp growth. for the 11- -- 12-year period the 200 to 2011, division's contribution is zero almost every quarter. it's because the defense share of gdp, even in the accounting model that it uses was 3% in the year 2000, rising to 4.7% or 4.8% in 2010 and 2011. that is simply too small for changes to have large aggregate effect. a defense cut of $100 billion per year would have been two thirds of 1% of gdp last year in 2011. it simply is not possible that a cut of that magnitude would have a large aggregate effect regardless of what one believes
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about the underlying economics. in other words, regardless of what you believe about multiplier effects and all the rest. that's what the simple correlation between quarterly percent changes in real gdp and quarterly percent changes in real defense outlays for the 12- year period from 2000 to 2011 is close to zero economically and never differ from zero as a matter of a statistical significance in any event. let's look at the time 1981 to 2000. defense outlays grew up to 1989 at 4.3% annually, but fell in the second period at 2.5%
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annually. average gdp growth rate in 1981 through 1989 and 1990 through 2000 were identical, 4.3% and 4.3% annually, and moreover, none of the correlations between defense and gdp per those time periods is statistically significant. let me turn briefly to a written belated topic, the economic cost of federal spending. the official spending day that you find in the budget ignore the adverse economic effects imposed by the tax system. that is what the economists call the excess burden of taxation. what that means is because taxes have distorting effects in terms of the economic behavior, the private sector has to shrink by more than $1 in order to send a
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dollar to the beltway. there is a large pier reliterature on this, which offers a range of estimates, a concern of one being 35 cents, for every dollar that the private sector sending in tax revenue to the beltway has to shrink by an additional 35 cents. that is quite a conservative estimate. the defense cut of $100 billion per year would increase the private sector by least $135 billion per year assuming the $100 billion cut out of defense is not shifted to other programs. that may conclude with one last point. conservatives properly are highly dibelius -- dubious of the gdp and employment benefits of federal domestic spending as illustrated by the meager 8 fax of the obama stimulus fiasco. there is no particular reason to
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believe defense spending is different. liberals and naturally take the opposite view. domestic spending rather is the path to natural and richmond, while the economic effects to the cuts to defense budget are not to be discussed. we have unfortunately in this election season and the inconsistency on this issue with the same people arguing against massive domestic spending increases as a sort of growth, and employment, while arguing against defense cuts because of the adverse effects on growth in employment. and vice versa. suffice it to say that that kind of inconsistency on both sides of the political divide is not very conducive to clear thinking. with that, let me finish. thank you very much indeed.
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[applause] >> thank you all for inviting me to come and share some of my thoughts on sequestration in these real or imaginary impact i have been measuring. the theoretic from work we have just heard may stand up to the test. we will have a discussion about that. the objectives of what i have been working on over the last year and two other reports, with a third identified that came out in september on the impact on small businesses from sequestration, and it have looked at nasa, particularly. the objectives are different. what i have to say it may or may not be in conflict with what ben as out why. the objectives were to take an economy in which defense
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spending and non-defense spending plays a role, creates jobs, base salaries and wages, the that is spent within the economy. it was not to test whether or not that spending could have been more productive in the private sector versus the public sector. that is a different analysis. what is proposed by sequestration is to take some federal spending out of the economy, roughly $115 billion next year, and what i have attempted to do was to put some price tag on that. it is not costless. unemployment does have a cost. we have learned that lesson over the last couple of years. it has a number of costs besides the unemployment insurance and lost skills and output.
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when we take money out of the economy, it has a cost. it is a different analysis to say if we put it somewhere else we get that back. the money we're taking out is all borrowed. it does not reduce taxes. it just reduces the deficit. by borrowing less, we have more money available for the private sector. that is a good thing. if they needed it. if there was a shortage of liquidity. ben bernanke has been working on that. that is a different study, too. what i have reported and which has been presented here to some degree is a way to calibrate what the costs and reduced federal spending are. it is not complete. the more recent study which looked at federal spending that
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he affects payroll as well as procurement, and not just military equipment, as bennett cited, but across all discretionary categories, would it cost $215 billion in lost gdp activity. that is 2/3 of what is projected to grow. if the economy grows at current projections, up to 2% next year, this would represent, to give it a reference point, 2/3 of gdp. at $110 billion, labor can come -- labour income, to understand what is tied to that spending, the analyses that i undertook put some jobs to that, 2.1 million jobs across all sectors of the economy.
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right off the top, there would be 277,000 federal jobs. nobody has addressed with the disruption to the private sector would be from all loss of those federal jobs. you cannot assume those 277,000 federal workers do not do something. you could assume that, but if you are flying from one airport to another, some of those workers are in the tower. meat section. research at nih, department of education, their grants would not be exempt, but who would administer them? national parks would be closed. we get inconvenienced when they close them for a couple of days, tourists do.
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for a year. cutbacks did not start on the second, but most agencies will not do this on the second. you'd better wait and see if it is real. i cannot imagine it would happen, but if it is real, already 1/4 into the fiscal year by that time, said the cuts are much deeper because of the period to achieve a year plus reduction is now six months. they are deeper and sharper. this has impact on the economy. you and i are affected. passports -- you need to get a passport? it will take longer. port inspections. these have costs. i am not arguing you might not be able to do it more effectively in a different manner. that is another story. i suggest the collateral effects are more important than the ones i have measured.
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these have an impact on small business. small businesses disproportionately provide support, the vendor and supplier services, the subcontractors services, and the induced services that are supported, retail consumer services, other services that are supported by a labor in, that would be reduced. you cannot just be that into the private sector because it was not real money to begin with. it was all borrowed. 2021, quite likely, i would not want to argue the economy would be better off in 10 years, but next year it will not be better off. small businesses account for 50% of the suppliers and vendors, subcontractors, and businesses that support, are supported by labor income.
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many of these i have not studied and have only anecdotal information, but i am told if they lose a contract, up to 20% of their business, they have to shut down. we only measure what is lost if you take a federal money away, but there is a consequence. most businesses are not publicly traded. most small businesses do not have a big backlog, do not have geographic this recession. they are specialized. they do not have funds to offset losses. they fire people really quickly. you lose specialized skills, and ultimately a number of businesses -- so there are secondary effects on the small side of business impacts. the question here, i do not have too much time, if we are concerned about reducing the federal budget, which i think it
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is hard to find somebody that should not be concerned about that, we're all concerned about being more efficient in the use of federal funds, our tax dollars. the question should be, how do we do this to minimize the short-term effects so we can get a long-term benefits how do we do it with the least disruption to the business sector, the private sector, from the unnecessary orf jobs? some regulation helps. food inspection is a good thing. maybe not all that, but certainly most of it. how do we reduced, knowing what the negative effects are on some order, how we minimize these? how do we become more strategic in this activity? workers will not be employed right away. they are pretty smart, they will get employed at some point.
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it is a very weak economy to be doing this kind of spending shifts, because it does not shift smoothly from public to private sector and it does not produce tax reductions which give you more disposable income. the theoretical discussion versus more applied discussion may leave room for discussion ourselves. thank you. >> let me introduce our third speaker. i said i was pleased to welcome dr. fuller. and pleased to welcome back stephen moore. steve splits his time between washington and new york, focusing on budget, monetary policy. he was the founder of the club for growth, and was the president of a group called the
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free enterprise fund. he worked for the joint economic committee for congress. he was a senior fellow the kate institute. -- cato institute. he was a consultant to the national economic commission in 1987 and the research director for a research commission under president reagan. steve moore. >> good afternoon. thank you for inviting me back. it is terrific to be with you. miami george mason economics graduate. ben, i love your study. it is a fantastic piece of work. thank you for writing it and doing the analysis. i agree with the entire study, and it is bought on.
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he said most all the things i would like to say, so let me address a couple of things points of emphasis. by way of starting, i'd want to say i was privileged for many years in the 1990 boss and through the mid 2000 cost to a couple times that years have lunch with milton friedman. it was an awesome experience. rose would be there. oftentimes others would go, and we would talk about the economy, and i got to learn economics from the master. when my last conversations, i said, what are the three things we could do over the next 20, 50 years to increase the rate of economic growth in this country? he said school choice, which is something he had pursued aggressively. number 2, free trade, and the third thing he said was cut government spending.
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i said, milton, by how much? he smiled and said by as much as possible. i think that is an interesting insight. if milton friedman or alive he would agree with everything that ben has said. one of the things i find interesting is that the argument against doing these cuts and facing this fiscal cliff is this reduction in government spending will cost all sorts of economic disruption, and a lot of the points that professor fuller made are correct. i think the broader point is this is a keynesian idea, that government spending will stimulate the economy and a reduction spending will destimulate the economy. as i look at the evidence, has never worked. there is no evidence that these ideas work.
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they did not work very well in the 1930's. they did not work for president bush when he tried to do a keynesian stimulus in 2008, and it did not work when we had the biggest keynesian experiment in the history of this country, which was in 2009, where the unemployment rate went up. i have looked at studies -- why didn't the stimulus work? the evidence is pretty clear. what happened, for every dollar of increased government spending, private sector spending went down for a dollar, and that is because milton friedman had a right. there is no tooth fairy out there. professor fuller is right that the most immediately impact the way to pay for this would be to approach spending by increase
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taxes. that is not what is suggested here. the spending is being mostly financed by borrowing. i would -- i am not as saudi torre as you are for what the effects are of borrowing. somebody has to buy the bonds. every dollar you borrow, that means somebody has to pay for it, and every dollar spending is still taking a dollar out of the economy. let's look at some of the evidence. one of the things i have looked at is exactly what happened in the 1980's and 1990's. by my measurements, we cut about $100 billion in real terms out of the defense budget after the berlin wall came down. this was a significant reduction in defense spending. about as big as they are talking
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about right now, and perhaps even bigger. at the time there were all sorts of apocalyptic claims about what would happen if we did these, and in states like virginia, that are heavily impacted by defense spending, and your state of california, those two states have the biggest -- are impacted most. california did go through a recession in the early 1990's, and people blame that on defense cutbacks. bridging it took about the same amount of cuts and we did not -- virginia took about the same amount of cuts and we did not experience the same recession. that is a really good example. i am so glad you brought it out. a couple of points for conversation. we had another cut in spending that we did that was similar to this, not of the same magnitude,
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back in 1987 when we had the rudman, the first sequestered. the average cutback was on the magnitude of 3%. that is not as big as we're talking about now. it is interesting to see how federal agencies responded. the way they responded is they could save money. we did not see a reduction for the most part and vital services. i agree with you on the programs you mentioned, like food inspection. that is a critical function. what we found out is these agencies were able to find ways to cut inefficiencies out of their budgets and we were able to save money without a recessionary impact. the idea that these federal agencies cannot take a cut of
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6%, i think is this proven by what has happened in the private sector. one of the things that happen in the recession is businesses did take -- and a lot of small businesses and large businesses as well, they went through this recession, the way they survived, they found ways to reduce their budgets and their spending by 5%, 10%, even 20%. if you look at their balance sheets now they are very healthy. if private sector companies can do that, the government can do it. it would be one thing to say it would be hard to take a cut. it depends on how long the sequestered goes on. we're not talking about a one- year to sequester. we're talking about a series of years of this. i want to remind people that these federal agencies, the agencies on the domestic side,
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they lived through a massive increases in their budgets. if you look at the budgets the budget committee has come out with, the average increase in spending on these agencies because of the first budgets obama, their budgets increased by over 60%. can it take a cut? my answer is yes. i think they can. the last point i want to make is something you were talking about, professor. there at our are lot of ways to do this other than a sequester. it is a mindless machete. the problem is they will not do the other approaches. uni could sit down and we could come up with a much more efficient way to make cuts that need be made, but just take an example of what happened last week when during the debate mitt romney brought up maybe we could
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cut corporation for public broadcast spending. in the last week, i see these ads rate he is got to cut big bird, elmo, and that is one cut in a tiny program. we could live without the subsidies. think about if you could try to come up with a laundry list of programs that could be eliminated. that would be a much more efficient thing to do, and we agree it would be much more efficient to cut medicare and social security and these big entitlement programs rather than some of these smaller programs. they will not do it. the republicans have made a strategic mistake politically in saying we do not want to do the defense sequestered, because in my opinion the only way you're going to drag democrats who did not want to cut deficit -- the budget, the only way you will get to the table is you have to
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do these sequester cuts, year after year, until democrats say we cannot take any more, we will have to make sure warren buffett does not get medicare or we will raise the and hamad age. i would make the case that one of the benefits is you keep squeezing these programs and finally the politicians will cry uncle. i am positive. i am extremely concerned, it is a disaster if we do that tax increase next year. that will very easily cause a double-dip recession. the economy cannot handle the increase in the personal income tax rates. you're talking about severely damaging effect on the supply of goods and services on businesses, investment, at the time the economy is fragile. we should make sure the tax sequestered does not happen, but for the first year i am in favor
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of the sequestered on the spending side, and, ben, thank you for writing this important paper. >> thank you, steve. since my speakers were so efficient, i will exercise the moderator's privilege and ask a question myself, and picking up on steve's last point. in your study, dr. fuller, the one that looks at the economic impacts of the one from july, that looks at the impact of both dod and non-dod spending cuts, you found a different effect. your assessment was the cuts to non-defense spending would have a more harmful effect in terms of job losses and economic activity than with the defense spending, which is different from what others have concluded. i wonder if you would comment on
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that. to the point which is what would be the economic effects of tax increases to cover the debt in lieu of sequestration? have you looked at that in the past put the you have a sense of that, or either ben or steve want to weigh in on that as well. >> the big difference between the proposed cutbacks in dod and non-dod a disease is non-dod agencies are largely labor driven, payroll driven. they do not have big procurement budgets. the almost equal reductions, a little bit greater, but let's call them equal, largely take a toll on labor income, goes into
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the country differently and would cost us 230,000 federal jobs right off the top at about $30 billion in payroll spending. that has a much different impact on the economy, the loss of that, whether it just before the first year or temporary short-term loss of that, would have a much bigger impact than the impact on dod, which has only 48,000 civilian payroll jobs at stake, and the rest are contractors. contractors spend the money differently. the money moves to the economy in a different fashion. the total impact are not too different. it is the timing of it. i would want to suggest that dod has already taken a big cut, when we talk about opportunities to cut further. they already have begun implementing a $487 billion to 10-year reduction.
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>> against the previous baseline. >> correct. they are making some reductions, and that non-defense agencies have at most, outside of homeland security, have not had much in the wake of spending increases in their 2011, 2012, or 2013 budgets. their budget is already tighter as we squeeze them further. the opportunities to cut back are more difficult, 2% is a lot easier than a 9.1%. it would be a very bad policy move to increase taxes to try to pay our way out this problem. some taxes, some entitlements, are going to have to be adjusted to change the revenue flow slightly and hopefully grow the economy stronger and reduce some spending.
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i think that analysis is beyond the ability of congress to figure out in the time available. that clearly would produce a better answer. the fiscal cliff, texas, almost universally, i have not heard anybody say it would not drive the economy into recession next year. i think that has to be avoided. it is a very fragile economy at this point. >> if you read editorials, you know we are against defense sequester cuts, and that is not because we think defense spending is efficient for the economy. it is because we are concerned about the national security implications of these cuts. there is an important distinction. if we need to spend the money to keep us safe, absolutely we should spend the money. what i object to is the idea
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that spending the money will be good for the economy. this is a dangerous world. we have already, against the baseline, made significant cuts, and there's no getting around it. these would cause a pretty big reduction in troop levels, military equipment, our strategies in terms of dealing with homeland security. the point i am making is we should make this decision based on national security, not based on some kind of keynesian stimulus to the economy. >> the fax at sequestration would take the budget to 2007 spending. >> i would like at something. one point -- we have 2500 m1 tanks the inventories, something
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on that order. where still producing them. why? they are produced in ohio, and ohio is a swing state with 13 electoral college funds. it is not because we are worried about the russian army pouring through the fold in the gap anymore. steve is quite right when he says i am right -- [laughter] the issue is what are our vital interests, what is the force structure needed to defend them, and what is the cost of that force structure? it is not whether there is going to be increased short-term unemployment anywhere. the second point, steve i think unintentionally has kind of slipped into a washington monument game sort of problem in which he talks about the passport office and --
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>> you have to be specific about which steve you are talking about. >> steve fuller. you guys to look so much alike. -- do look so much alike. the argument that somehow, assume away the privatization issue, a debate for another day, the argument that there are not things we would cut first at a lower marginal value and the passport office and the rest, the drug war, militarization of federal law enforcement, why does the food and drug administration have a swat team? i have not gotten a straight answer to that question. i have asked it many times. the destructiveness of the entitlement programs. to give one example, people
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argue with a small tweak to the indexing formula for social security we could make it solvent for the next 80 years. true enough. that does not do anything about the economic damage caused by the social security system causing people to save bless. steve -- i think steve fuller is slipping without thinking about it too carefully, as i interpret joined washington monument game, which is dangerous. let me to return, steve fuller, to my current example. if crime rates fall and there is a reduction in the size of the market for private security services, and there is a short- term unemployment among those who otherwise would have provided private security
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services, tell us why that is a problem. please. >> he will do that in response to another question. thank you, gentlemen. we have time for questions. please wait for the microphone. please identify yourself and your affiliation, and the jeopardy! rule applies here. speeches, please. who is first? over here? >> the question is for dr. fuller. we mentioned that if the sequestered does not occur, then tax payers will be financing that additional pentagon spending. i am curious if you or anyone on
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the panel has analyzed the job loss impact that we would incur as taxpayers have to pay that back with interest? >> i have not analyzed that. >> would either of you care to speculate? >> a person at boston university has done work on that issue. effects ofhe fac exponentially increasing government debt, and i would not confuse that with interest payments. the present value of interest payment -- i would be careful about that, but i do not remember his most recent estimates. if you go to the boston you willy website, find a lot of work on that topic. >> spending is taxes.
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the counterpoint of your question is they are not going to raise taxes now when they do the spending. that means they will do it later. a perfect example is the stimulus bill. it did not create jobs. all we got for it over the last four years was all this accumulation of debt. now we hear in the debates we have to raise taxes to pay for this debt. it is paying me now or a pay me later approach, and that is a valid point, that at some point spending always has to be paid for, and one of the ways we pay for it is taxes. there is a lot of talk about fairness out there, how is it fair that people who are not even born yet will pay for a lot of spending we are doing now. >> you do not believe we are not just going to inflate it away? the average maturity of bonds
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now is 5.5 years, i think? most of which is not indexed, and the chinese hold lots of it. they do not vote. at least they may make campaign cut rations, so it strikes me in my way of thinking that the incentive to inflate away some substantial part of the debt is enormous. i cannot envision a world 10 years from now " in which the inflation rate is not substantially higher than it is now. >> in the back. >> i have known steve for about 15 years.
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i consider you a personal friend. it is too late to get out of the stock market. you scare the hell out of me. >> you did not have a question asked. next. >> at least he kept it short. >> i have a question for all the panelists. forget your potential political favoritism, but how does the idea of allocating four% of gdp for defense spending play out in an economic sense? is there an example somewhere else in the economy that is basically done, and how does that affect the economy? >> % of gdp is a measure of what we can afford, it is not a measure of what we need. once again, we cannot talk about the required size and
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composition of the defense budget without doing some kind of serious analysis of the u.s. vital interests. i have not done that, although i have done some writing on that, but that is what is necessary. the point of the paper is that the public discussion is really not focused on that much more relevant question. what is really focused on is an irrelevant question, which is what are the short-term gdp a fax of changes in the defense budget, and by implication, other changes in the budget as well, which is the wrong question. the question is, where are the resources used most productively in the coming, and what is the path that to take us there. percent of gdp is not really except in terms of --
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>> you talk about reduction of spending in the 1990's, but the domestic budget shrunk as well in the 1990's. bill clinton was in office, federal spending was 22% of gdp. eight years later, we were a little over 18%. that is a big cut in the cost of government. that was the biggest boom. we ever saw in this country. the economy never did better. i do not see evidence that these cutbacks in spending -- i agree with professor fuller that doing it rapidly overnight will cause some dislocation. i think the medium and longer-
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term the facts of this will be quite positive. >> i agree with steve to in that -- and in thatben as well and respect what the long-term benefits are. the issues i have raised and it is beyond the washington monument in fact is that cut in federal agencies uniformly, which is almost what sequester requires, does not allow federal agencies to decide they can just do 2% this year and 3% or 10% a year later. they have to go in there and cut severely. dod has already started that process, and their ability to maintain their levels of readiness as is required of them, they claim at least, i cannot judge this, are already
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close at hand. moredo not need any d tanks, but they might need more drones. when i testified before the house armed services committee, they said -- i do not know this to be true -- that they had never worried much about the economic impact of cutbacks. they were worried about the ability to complete the mission of defense and readiness. democrats and republicans both said we cannot have these impacts, but they could not agree how they would avoid them picked that is the issue today. >> we have done work on the 4% question, trying to calculate how that would be. i see the romney can is claiming these numbers is made up, and
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that is fine. please tell us what you think the additional cost is because presumably someone there has done the math. one other point on spending and defense. it is true the total military spending as come down very slightly over the last few years with inflation-adjusted dollars. most americans think that is a good thing. the base pentagon budget in inflation-adjusted dollars remains close to its historic high, in spite of -- >> relative to inflation? >> yes, it is basically flat, and you can go back to 2000 levels, a historically high point, but under current prections, the base budget holds constant and increases
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vary slightly. yes sir, go ahead. >> i would like to have a small disagreement with mr. zycher. he said defense spending or any other line items could be measured in terms of what we could afford as look as a percentage of gdp. i think that is the wrong benchmark for us to use. let me just say no private sector organization in the world would ever use the number of widgets it produced to determine where it should invest its money in the future. rather, profitability is the key. they have to use it. we should do more of the same. instead of a soviet-style
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outlook as far as our government spending is concerned come we should be concerned with what we really have left at the end of the day. we know it is deficit right now, but that is all the more reason why both sides of the question should have to be looked at. the spending side and the revenue the spending side and the revenue side. when we look at productivity, when we look at the line items of the budget, the difference between spending the money on the military hardware versus spending the money on other sectors of the economy, not just on the multiplier effect on jobs and the velocity of money in the economy over the immediate years, but long-term productivity gains -- research and development, what a train would produce, let's say, in terms of moving freight. >> just one quick comment on
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this. i love what you just said, and i agree really so much with it. look, one of the problems with government, because there is no profit in government by definition, is that we tend to measure committed to these things by how much we spend. the permit example -- perfect example -- well, with the military budget -- the president keeps saying that we will improve education -- we measure education by how much we spend, not by test scores and other things. that is a very big efficiency of government did you are quite right. if we actually measured education, we would get better test scores. re.ok, hee >> david eisenberg, huffington
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post. because i have heard different things during the course of the presentation i want to get clarity. my question is this -- to dr. fuller and anybody else who wants to respond -- over the years i've read literature on what would spend to turned military-industrial complexes -- is the least efficient way to create jobs. almost anything would be better -- digging ditches, solar panels, whenever you want. if that is true, would we not actually be pleased that a would be sequestration cutting money from the least efficient job producing aspect of government? >> thank you. oh -- >> it's ok.
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he directed it to dr. fuller first. >> i don't think i will argue with use that money spent in government is less efficient than the private sector. addressing it in terms of job creation, i might produce a different outcome than i reported. if you take $51 billion out of dod, 57 or whatever the numbers are out of non-dod, is it going to have an impact on employment? is there some aspect, some economic consequence we are aware of in making that decision?
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is there a consequence? with jobs created efficiently? if you buy your plans, with their be fewer airplane manufacturing jobs? what would those people do? something else other than manufacturing airplanes. is that good? i'm not sure. does it cost us something? yes. unemployment does have accosted this would add a point or a point and have to the unemployment rate. is that good? i cannot imagine anybody arguing that it is a good thing, not in the short term. you have to look at this in those terms and then decide how we minimize those kinds of consequences and chief loss of federal spending and more growth in the private sector. i would love to have that discussion. >> the premise underlying question -- forgive me -- is precisely wrong.
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jobs are a cost of government spending, not a benefit, as counterintuitive as that may seem. why? suppose president obama were to say "my energy policies will increase the use of high-quality steel." that would be great for steel producers and steel workers, but for the economy as a whole, that is a cost, because the costs associated with steele would not be available for other uses. similarly, government spending that consumes labor, or the labor consumed by government spending programs -- that can no longer be used in other sectors. government spending programs, the employment created by government spending programs has to come out of other economic sectors, whether it is the government sector or the private sector. therefore, it is an adverse effect, the cost, not a benefit in the aggregate of the
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government's spending program. again, as counterintuitive as that made scene. -- as that may seem. >> government does not create jobs, it moves jobs. next. back there. >> coalition of service industries. the way i see it with regards to sequestration or the budget deficit in general, you have two options. one, do nothing, and let sequestration kick into effect. the economy could shrink and there could be in negative impact it the other is to do something, and that would involve some adjustment of tax policy or spending policy. however meager it is, if we do
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something it will increase the size of the bubble, or risk increasing the size of the bubble, and that it only furthers our dependence on the government intervention, whereas it could be the source of a problem. my question is, can you please respond to that? it is clear to me that to do nothing would be better and let this happen and let the dust settle and move on, rather than increasing the size of the bubble. >> thank you for your question pre or maybe to rephrase it, if doing nothing is the solution, what was the grand bargain or solution that was tried and failed numerous times in the last few years? >> the reason we have this whole discussion is that the debt talks blew up. i think that is because the democrats would not agree to anything that did not have a major tax increase, and the republicans were right under that circumstance to walk away from the table.
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i do think that joe biden had a point last night, one of the few points that he had, which is that it is true that the republicans agree to this. this was the deal, that if we cannot reach the agreement, we will do these cuts. they're kind of going back on it now, saying that we did not literally mean tax cuts. well, everybody knew what the deval position was if we did not come to an agreement. the point i was trying to make is that it is important to do it sequestration because it makes it more likely -- it will cause pain and suffering, no question about it, but it makes it more likely that we get some sort of real progress on these bigger issues about runaway entitlements the big things that need fixing. >> you have offered only two choices. i have been arguing that there was a third, fourth, fifth,
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sixth. i do think that the sequestration was the poison pill, and is slowly getting people's attention. it has taken a long time. it would be awful if that is what it takes for the congress to come to terms and workout a solution to tax policy and spending policy. there are other choices, and that is what i would argue for. >> i agree pretty largely with steve on this. the sequester has the virtue of not forcing congress so much but the electorate to make the choice. i think that whoever wins the election in three weeks will have a mandate to assume, or can claim a mandate plausibly to move forward with something other than a sequester if that is what the electorate indicates.
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the sequester is quite useful tool for forcing both of the electorate and congress to make decisions. >> can i ask these two guys a question? i would like both of you, if you feel up to it, to address this issue of about -- i've heard a lot of arguments made by some people saying, you know, the defense department is a major driver of technology, the defense department is what does the internet, cellphones, all these technologies. i don't know enough about it, i am not an expert on this, but i wonder if you could discuss that. is it pro-investment to spend money on the military? maybe the other argument is that if we are not wasting its money on things we don't have to spend on in terms of military systems, it might enhance technology. what is your view on that? >> my view is a two-part answer. a, the purpose of defense
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services broadly speaking is to defend capital against foreign aggressors, foreign to structure, both physical, human, etc. to the extent that the defense budget is too small, you might get too little investment. that is a reasonable argument. i don't think we are in that world, but that is a reasonable conceptual problem. the second point is how did we ever move from caves to buildings, from fire to telephony, etc., without a massive defense structure? some sort of under-incentive in the private sector to engage in that investment -- i am not convinced of that, but that is not an unreasonable or to madrid but other than the corporation income tax, which forces the private sector to use to buy a discount rate, i don't see any reasons to believe that the market in s and technological
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advance -- invests in technological advance to an inefficiently small degree. i have never bought the argument that you have to have a large defense the establishment to drive the efficient amount of technological investment. i just don't buy it. >> there has been a lot of attention given to innovation that is underwritten or supported by federal spending that could be lost, whether it is the national science foundation, nih, pathat they can take risks that the private sector cannot take. we used to, when at&t ran bell labs as a monopoly -- we used to get basic research. the are indeed being funded in the private sector today is more about -- the r-&-d being funded in the private sector today is
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more about the d and less about the r. i think there is some public interest in that pit what i would be most concerned about is that you are putting yourself to a vote -- we are putting it to a vote in a little more than three weeks, and voters don't know what the issue is. they are not voting on sequestration. they don't understand the role of government. they may sate it is too big, i want my taxes lower, but they don't understand what they may be giving up. whether it is the meat inspectors or the easy things i identified, most of us cannot identify what benefits we get from the federal government. i would assure you that if you take 275 federal workers, to hundreds of the 5000 out of 2 million out -- 275,00 out of 2 million out of the system early
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quickly, you are going to notice it. it is too late to vote again. i don't think we can leave this up to a vote. >> i was going to pick up on that point, too. i disagree with you a little bit. both candidates have expressed opposition to sequestration. but they have not clearly articulated what their alternative is. and that is a problem. i do disagree with you a little bit. >> wait a minute -- >> we have had this whole discussion on something that is not going to happen. i would bet four-one odds that they will turn off the sequester, it is not going to happen. >> by just turning it off? >> they may do something else, but in the short term they will turn it off. the lame duck session -- >> the entire debt ceiling thing was a complete charade. >> yes.
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>> hold on a second. all of the people who held the line on the debt ceiling -- again, they confronted speaker boehner with that. they were holding the line on that. they're all going to say, "never mind, what we were holding the line on in the summer of 2011 doesn't matter anymore"? >> not all of them, but enough of them. >> once again, i find myself in the quite familiar position of disagreeing with everybody about everything. [laughter] first of all, yes, neither romney nor obama has specified a program in the budget. nonetheless, it is easy to predict that obama in a second term would emphasize increased domestic spending and less defense spending, and to some degree romney would emphasize the opposite. the argument -- and extremely
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weak argument -- the mass of voters don't need to understand this, only the marginal voters need to understand. i have a paper on why be a national voter ignorance model is wrong. but the argument that people are dumb is not very productive of actual voting behavior. people understand the interests and vote accordingly. >> 1:15 -- >> your good? >> other questions. you in the front? >> first, i would like to thank the doctor for correcting the error that i believe that you made, mr. moore, by saying that the pentagon budget is being
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dramatically decreased. the decrease in the base budget is a very small and is not -- and is actually projected to grow in inflation-adjusted terms. i thought that professor zycher mentioned that he has not done -- that an analysis of specific defense cuts is a specific thing that needs to be done. i would also like to point out that dr. preble has done an outstanding study of that as the cato document. my question -- earlier, someone mentioned the production of tanks in ohio, and the political implication being that the reason those tanks are being made is because of the election
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there. a number of people have identified the fact that the large defense contractors, like boeing and lockheed, are systematically destroying the subcontractors throughout the country -- disturbing as the contractors throughout the country if we accept dr. preble's analysis of how defense cuts can be made without affecting security, how can we address the power of these huge corporations and the way in which they have distributed their subcontractors? >> i don't agree with your premise. i have another paper, actually, on why a certain amount of defense is deficient. to the extent that the defense services or what economists call the collective good, and eigh th
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benefits from defense spending \ -- the benefits from defense spending occurred to everyone and people who pay their taxes cannot be excluded from accruing them. the market will underwrite collective goods and we need the government to provide the efficient on of collective goods. that is the basic econ 1 textbook are in. the problem is that if you think that through carefully, by positioning defense bases and manufacturing facilities and every congressional district you can, that is one way of actually correcting for what ought to be called the government's failure, to get the provision of collective goods up to the division level. i think the argument you are making that there is some sort of -- i once a conspiracy treat you did not say that. but this effort on the -- i
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won't say conspiracy. you did not say that. but this effort on defense is not right. >> the back. we need to keep a microphone in the back. >> commonwealth institute. dr. fuller, if a short-term decrease in government spending cost jobs and back to economic growth, would you advocate a short-term increase in government spending across the board to increase jobs and economic growth? >> you asked if i would advocate it could probably not, but would it? i think he can strategically placed federal spending and waste that would generate quick increase in employment -- you can strategically placed federal spending in ways that would generate a quick increase in federal employment. but we have a surplus of workers and a surplus of capital.
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assuming there is a shortage somewhere right now -- we either create more work or, you know, people who pick up paper along the roadside -- not very good jobs, but we could fill those jobs with people who were unemployed if we wanted to. just to put them back to work. maybe paid them more cleaning up and what they're getting on unemployment insurance. i am not sure. that pays pretty well these days. >> that why was the stimulus such an abject failure? >> i would argue that if you track the performance of the economy in the six quarters following the beginning of the recovery, it actually performed better than it would have had that stimulus money not been in circulation. i don't think -- i think the economy would have been in much worse shape today had not been some stimulus.
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at the time the stimulus was designed -- i don't think it was designed or implemented very well -- but at the time, it was thought that the recession was a 2.8% recession. it turned out to be 3.5. you can say it was a failure and that is what you get away with in the vice presidential debates. but fact checkers need it to be at hand here, too. >> other questions? back there. >> i just have a question for the panelists. does say the budget cuts take place. in regards to military strength numbers, what are your estimate on percentage decrease? >> estimates of what? >> impact on the size of the
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military in terms of fighting efficiency -- >> i am not qualified. >> 10% is a good round figure. some personal expenditures are exempt explicitly. others have been carved out by the obama administration, who said they would protect them. but just to be clear, when we asked them to write a paper for us, that was after ben and i had written a paper on twice the size of the sequestration. there are others in this city who had other plans for reducing military spending, not on the grounds that has the economic effect -- that it has the economic effect, but that it is not necessary. to use the crime analogy, crime has declined, and therefore the need for those services has also declined.
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i encourage you to look at our earlier study from 2010 and others. even bowles-simpson had some talk in there about military spending and what that would look like. >> one further point to make, that if you look at the budgets, the baseline numbers, exclude the overseas contingency operations, for the out years, those numbers are slightly funny, because the cuts assume that the baseline at flea well -- that the baseline actually will have been what is spent in the absence of sequestration. i am not convinced of that at all. those numbers may have been smaller, in which case -- >> adding to that, one of the reasons i am in favor of sequester, even regardless of what happens -- any of their production strategy should start with an across-the-board cut. maybe this is too big in terms of security, but at least some
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cuts across the board, even defense, need to be made. one of the things we've not mentioned -- i don't know a lot about military issues, but i do know this -- if you put in place even one year of a sequester, the savings are not just for one year. the savings magnitude hugely over the next five, 10, 20 years, because you have the spending of growing at this magnitude and what you do is you ratchet it down by this amount the first year. you may save -- just making it up, $100 billion of savings the first year. talking $2ou're trillion of savings. you have a multiplier effect. that is what happened in 1986, 1987, one of the things that helped to produce the lower deficits in the 1990's. >> right here, sir.
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>> i respect to defense spending, economic effect of defense spending -- john shermer, u.s. army, obviously -- there are three components of defense spending. force structure, readiness, and modernization. it seems to me that to look at it from the aggregate is interesting, but also drill down into the dollar that goes into force structure, what does that buy us from economic perspective, the dollar that goes into modernization, what does that by us, and the dollar that goes into readiness, what does that buy us? >> you would have to have a market where those things are priced to we don't have that. you can ask the question much more qualitatively. what are the contributions of those functions to "national
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security," and try to put a value on that. it is like trying to put a measure on the readiness of the division. it is very difficult to measure those things in dollar terms. >> but dr. fuller, you chose to focus on the procurement aspect. presumably there is a reason -- maybe you can answer that question in a different sort of white. > -- way. >> i focused only on military equipment. we have estimates of what kinds of cutbacks -- what the magnitude would be across different procurement categories. it was easier to do, it was finite, it was early in the discussion of the budget control act. we always excluded military peril, because they had been largely exempted -- military
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payroll, because they had been largely exempted. the others are non-military. civilian dod workers, operations and maintenance -- i find it differently than your three categories -- and procurement of hardware and software. to define the budget as eligible, meaning that it would all be hit equally hard, it would be difficult to say what the impacts would be. and in some cases impossible to analyze unless you have an alternative. >> well, i want to thank you all. me for continue discussion in the conference center. [applause]
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our conference folks will show you the way. there are restaurants along one more thing -- go orioles, go nats. [laughter] >> great to see you again. i hear you on the radio all the time. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]
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speaking at the sbreppid panetta warned the u.s. is facing the possibility of a pearl harbor that could shut down the networks and critical network systems. this is about 40 minutes. >> frank, five words, you
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deserve to be here. ladies and gentlemen, it is now my great pleasure and high honor to introduce one of the most talented and experienced lead ners american government. a mon who serves our country by meeting the extraordinary challenges of our times. i'm sure secretary of defense panetta thinks back to his days in the u.s. intelligence where he received the accommodation medal. as a member of congress he chared the committee. from there president clinton tapped him to become chief of staff. lee on panetta made and very public contribution to the defense of the united states of america and to our very own new
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york city. he oversaw the successful and daring mission that ended the life of one osama bin lad din t. persistence, courage and tenacity required to accomplish this remind me of a quote from president kennedy let every nation know that wishes us ill should pay any price be any hardship support any friend oppose any foe to ensure the survival and success of our lib bertiss. or as secretary panetta would later say no one attacks the united states and gets away with it. [applause]
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so since july 2011 lee i don't know panetta has serves as our sec stair of defense. secretary panetta has dedicated much of his life to public service. i would be remisif i did not mention the ten years he's be directing with his wife the panetta institute where they instill in young men and women every day the virtues and values of public service. [applause] now we all know there are many who never left the shoreline of the pacific shoreline. secretary panetta can look back on one of the most remarkable careers of our times. secretary panetta, please join me on the podium.
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>> secretary panetta could be honored for a number of positions he's held. in his service in congress he strengened america with his focus on budget, civil rights education and the environment. in the white house he served as director of the office of management budget and his chief of staff brought policies that brought a balanced budget in the 1990's making america stronger. he enabled a response to international terrorism with notable results disrupting and defeating terror networks.
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as the 2323rd secretary of defense he sought efficient sis while standing resslute in fafere of an adequately funded military. we are pleased to bestow the 2011 award recognizing those outstanding americans who is contributions to the country of security as the total product of our economic intellectual moral strength. secretary panetta. [applause] >> thank you. thank you very much. thank you so much for this wonderful evening and the chance to enjoy some terrific
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company and be able to express my deepest gratitude to this organization for all of the great things that it does on behalf of those that serve in our military. bruce, my greatest thanks to you for your kind remarks and your leadership here. and i accept this award not so much for myself, but i accept it on behalf of the men and women in uniform who are putting their lives on the line every night, every day in order to protect this country. [applause] i want to congratulate the troops from the 82ened, they're the very best. i also want to congratulate
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frank for receiving this award. the great service that he does in helping to find jobs for those that are returning so that they can be part of their community after serving this country to protect their community is outstanding. and besides that, and perhaps most importantly, he's italian. it's nice to have another italian honored this evening. [applause] i also want to thank fran town send. she's a great friend and master of ceremonies this evening. and the reason i asked fran to serve on the board is because she is bright, she's dedicated, she's a straight talker, she knows what she's talking about,
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she's dedicated to this country. and in a room of a lot of ugly old guys, she's not bad to look at. general, thank you for your leadership as well and for your distinguished service to this country. i am truly honored to be with you this evening. we gather in the midst of a very important national contest, it's one that will continue to play out over the coming weeks in unpredictable ways before a final decision is reached. and in fact, some of the key players are dualing tonight. so i want to be very clear about where my loyalties lie in this contest. i have always been and always will be for the new york yankees.
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and i think the score is 1 to 1, right. in all seriousness, i really do appreciate the opportunity to come back to this great city. new york is a special place for me. and i'll tell you why. i am the son of immigrants and both of my parents came through new york, like so many millions of others. that make this is a special place for me. i also had the opportunity to be here and work as an executive assistant to the mayor of new york city. i also had the opportunity to work very closely with the delegation in congress, as a matter of fact, in washington i lived with chuck humor and a group of other members of
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congress in what was well-known as animal house in washington. and you can't live with humor and not develop an appreciation for new york city. i also served on the board of the new york stock exchange for six years. and i was on the board when 9/11 took place. and i want you to know how much at that time i appreciated the great courage of the people of new york in the face of that attack and i remembered that courage when i had a chance to lead the operation that went after bin laden. we sent a very clear message to the war that in fact don't ever attack this country because you will not get away with it. [applause]
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i've long appreciated from my own experience new york's role as the center of gravity for our nation's economy. this is where it's at. and for that reason, it's an honor to be able to speak before this kind of distinguished audience of business leaders and innovators, because you understand what a strong national defense is all about. and you understand that a strong national defense and a strong economy go hand in hand. with that in mind, tonight i'd like to discuss with you an issue that i think is at the very nexexiss of business and national security. the threats facing the united
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states in cyberspace and the role that the defense department must play in defending this country from those kind of threats. we're on an aircraft carrier, a famous and great aircraft carrier and it's a fitting and appropriate venue to have this discussion. this ship and the technology that's on display at this museum, atests to one of the central achievements of the united states in the 20th century, our ability to project power and strength across the land, across the high seas, across the skys and across outer space. we secured those do mains.
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securing them helped ensure that they were used to advance peace and prosperity and were not used to promote war and agregs. it is with that same thing in mind, today with very to address a new domain that we must secure to have peace and prosperity in the world of tomorrow. cyberspace has fundamentally transformed the global economy. it's transformed our way of life providing two billion people across the world with instant access to information, to communication, to economic opportunities. cyberspace is the new frontier, full of possibilities to advance security and prosperity
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in the 21st century. and yet with these possibilities, also some new perils and new dangers. the internet is open, it's highly accessible, as it should be. but that also precents a new at the rain for warfare. it is a battlefield of the future where adversaries can seek to do harm to our country, to our economy and to our citizens. i know that when people think of cybersecurity today, they worry about hackers and criminals who prowl the internet, steal people's identities, steal sensitive business information, steal
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even national security secrets. those threats are real and they exist today. but the even greater danger, the greater danger facing us in cyberspace goes beyond crime and it goes beyond harassment. the cyberattack perpetrated by nation states are violent extremmist groups could be as destructive as the terrorist attack on 9/11. such a destructive cyberterrorist attack could virtually particle lies the nation. let me give you some examples of the kinds of attacks that we have already experienced. in recent weeks as many of you know, some large u.s. financial
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institutions were hit by so-called distributed denial of service attacks. these attacks delayed services on customer web sites. while this kind of tactic isn't new, the sail and speed with which it happened was unprecedented. but even more alarming is an attack that happened two months ago when a very sophisticated virus called -- infected computers in the saudi araben oil company. it included a row teen called a wiper coded to self-execute.
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this routine replaced crucial systems files with an image of a burning u.s. flag. but it also put additional garbage data that overwrote all the real data on the machine. more than 30,000 computers that it infected were rendered useless and had to be replaced. it virtually destroyed 30,000 computers. then just days after this incident there was a similar attack on qatar. a major energy company in the region. all told, the virus was probably the most destructive attack that the private sector has seen to date.
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imagen the impact an attack like that would have on your company or your business. these attacks mark a significant escalation of the cyberthreat. and they have renewed concerns about still more destructive seen owes that could unfold. for example, we know that foreign cyberactors are probing america's critical infrastructure networks. they are targeting the computer control systems that operation chemical, electricity and water plants. and those that guide transportation throughout this country. we know of specific substances
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-- instances where intruders have gained access to these control systems. we also know that they are seeking to create advanced tools to attack these systems and cause panic and destruction and even the loss of life. let me explain how this could unfold. an agresssor nation or extremist group could use these kinds of cybertoo to gain control of critical switches. they could, for example, derail passenger trains or even more dangerous, derail trains loaded with lethal chemicals. they could contaminate the water supply in major cities or shut down the power grid across large parts of the country. the most destructive seen owes
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involve cyberactors launching several attacks on our critical infrastructure at one time. in combination with the physical attack on our country. attackers could also seek to disable or degrade critical military systems and communication networks. the collective result of these kinds of attacks could be a cyberpearl harbor. an attack that would cause physical destruction and the loss of life, an attack that would particle lies and shock the nation and create a new sense of vulnerability. as director of the c.i.a. and now as secretary of defense, i
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have understood that cyberattacks are every bit as real as the more well-known threats like terrorism, nuclear weapons proliferation and the turmoil we see in the middle east. and the cyberthreats facing this country are growing. with dramatic increase and advances, this is an area of dramatic developments in cybertechnology. with that happening, potential agresssors are exploiting as a rule nerbles in our security. but the good news is this, we are aware of this potential. our eyes are wide open to these kinds of threats and we are a nation that, thank god, is on the cutting edge of this new
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technology. we are the best and we have to stay there. the department of defense in large part through the capabilities of the national security agency, n.s.a., has developed the world's most sophisticated system to detect cyberintruders and attackers. we are acting aggressively to get ahead of this problem putting in place measures to stop cyberattacks dead in their tracks. we are doing this as part of a broad whole of government efforts to confront cyberthreats. the department of homeland security has the lead for domestic cybersecurity. the f.b.i. also has a key part to play in investigating and preventing cyberattacks. and our intelligence agencies,
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of course, are focused on this potential threat as well. the state department is trying to forge international consensus on the roles and responsibilities of nations to help secure cyberspace. the department of defense also has a role. it is a supporting role but it is an essential role. and tonight i want to explain what that means. but first let me make clear what it does not mean. it does not mean that the department of defense will monitor citizens personal computers. we're not interested in personal communication or in e-mails or in providing the day-to-day security in private and commercial networks. that is not our goal, that is not our job that is not our
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mission. our mission is to defend the nation. we defend, we deter and if called upon, we take decisive action to protect our citizens. in the past we have done so through operations on land and at sea, in the skies and in space. in this century, the united states military must help defend the nation in cyberspace as well. if a foreign adversaries attacked u.s. soil, the american people have every right to expect their national defense forces to respond. if a crippling cyberattack were launched against our nation, the american people must be protected. and if the commonder in chief
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order -- commander in chief orders a response, the defense department must be ready to obey that order and to enact. to ensure we fulfill our role to defend the nation in cyberspace, the department is focusing on three main tracks. one, developing new capabilities. two, putting in place the policies and organizations we need to execute our mission. and three, building much more effective cooperation with industry and with our international partners. let me briefly talk about each of these. first, developing new capabilities. d.o.d. is investing more than $3 billion annually in cybersecurity because we have to retain that cutting edge capability in the field.
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following our new defense strategy, the department is continuing to increase key investments in cybersecurity even in aner ra of physical restraint. our most important investment is in skilled cyberwarriors needed to conduct operations in cyberspace. just as d.o.d. developed the world's finest count terrorism force over the past decade, we need to build and maintain the finest cyberforce in operations. we're recruiting, we're training, we're retaining the best and the brightest in order to stay ahead of other nations. it's no secret that russia and china have advanced cybercapabilities. iran has also undertaken a concerted efforts to use cyberspace to its advantage.
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more over dod is already in an intense daily struggle against thousands of cyberactors who probe the defense department's networks millions of times a day. throughout the innovative efforts of our cyberoperate tors, we've been trying to enhance the department's cyberdefense program. these systems rely on sensors, they rely on software to hunt down the malicious code before it harms our systems. we actively share our own experience defending our systems with those running the nation's critical private networks. in addition to defending the department's networks we also help to deter attacks. our cyberadversaries will be far less likely to hit us if
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they know we will be able to link them to the attack or that their effort will fail against our strong defenses. the department has made significant advances in solving the problem that add certificate sares more complex, identifying the origins of that attack. over the last two years d.o.d. has made significant investments in forensics to address this problem of at bution. and we're seeing the returns on that investment. potential agresssors should be aware that the united states has the capacity to locate them and to hold them accountable for their actions that may try to harm america. but we won't succeed in preventing a cyberattack through improved defenses

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